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India’s top three IT companies — Tata Consultancy Services, Wipro and Infosys — appear to have successfully overcome the challenge posed by the Covid-19 pandemic, if the strong rebound in net employee hiring in the second quarter is any indication.
This comes in the backdrop of improved revenue performance and signing of record deals in the second quarter. Net employee hiring is considered to be a key metric indicating the robustness of a sector.
TCS reported a net addition of 9,864 associates in the second quarter as against a decline of 4,788 in the first quarter when the pandemic was at its peak. “We started onboarding freshers, and increased our recruitment globally in Q2, in anticipation of the growth trajectory we see ahead,” said Milind Lakkad, Global Head, Human Resources, TCS, in a release.
Wiproadded 3,439 associates (net), including 3,000 freshers, in Q2 as against a decline of 1,082 in Q1. “The demand environment has improved from Q1. The overall pace of decision making has improved. Though, I find it still a bit slower for the larger ticket hunting deals,” said Thierry Delaporte, CEO and Managing Director, Wipro.
Infosys’ net employee hiring increased by 975 in Q2 against a net decline of 3,138 employees in Q1.
Recovery in the sector
“The net headcount additions reported by Wipro, Infosys and TCS for Q2 is encouraging. This should be seen in the context of the net reduction reported in the previous quarter. A net addition of over 14,000 in Q2 as against a net reduction of 9,000 reported in Q1 showcases a potential V-shaped recovery in the IT services sector,” said Kamal Karanth, Co-Founder of Xpheno, a specialist staffing firm.
The increase in net employee hiring came as revenues grew. TCS’ revenue in Q2 was ₹40,135 crore, up 4.7 per cent QoQ and higher by by 3 per cent YoY. Similarly, Infosys’ reported a revenue of ₹24,570 crore, a growth of 3.8 per cent QoQ and 8.6 per cent YoY. Wipro reported ₹15,115 crore in revenue, up 1.4 per cent sequentially and a marginal decrease of 0.1 per cent YoY.
Yugal Joshi, Vice-President, Everest Group, a research firm, said that all the three service providers believe there is more clarity in demand now and they can hire according to their earlier plan which was kept on hold.
Sanjeev Hota, Head of Research, Sharekhan by BNP Paribas, added that IT companies have stepped up hiring on the back of improvement in business outlook. and increase in demand for people with niche skills.