India’s top five IT services firms added 25% fewer employees in fiscal year 2019-20
India’s top five IT services firms — Tata Consultancy Services, Infosys, HCL Technologies, Wipro and Tech Mahindra — added 25% fewer employees in fiscal year 2019-20, as automation picked up pace amid slower business growth.

The five software services providers added a net 66,500 employees, against net hiring of 87,060 people in financial year 2018-19. They together employ nearly 1.14 million people, a quarter of India’s 4.3 million technology workforce.

“This clearly represents two things. It’s no longer body-shopping. The world is changing from linear to exponential, which means new technologies such as artificial intelligence, automation and new-age technology platforms are enabling delivery models that are not linear to a number of people,” Harshvendra Soin, chief people officer of Tech Mahindra, told ET.

Mundane tasks have been automated, reducing the need for some employees and helping existing staff become more effective in solving business problems of clients.

The tech services providers have seen demand for digital-technology led services surge, as opposed to plain-vanilla software maintenance, with more users accessing services online through hand-held devices.

The subdued hiring trend clearly indicates that organisations are trying to “improve on their ability to deliver more with lesser workforce and by automating predictive work”, said Rituparna Chakraborty, senior vice-president of staffing firm Teamlease. “I am not surprised with the trend.”

Infosys reported a steep decline in net hiring, as the second largest Indian IT services firm recruited nearly 10,000 fewer people compared to FY19.

Infosys and Tech Mahindra have also reported significantly higher attrition in the last fiscal year, at nearly 20%.

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The IT sector’s net hiring number, albeit reduced, is a testimony to the fact that there is positivity and demand, said Chakraborty. “Their ability to service additional demand with fewer people has also improved,” she added.

The top five have promised to honour job offers already made but have suspended new hiring in the wake of the Covid-19 pandemic.

Although HCL Tech said it would hire 15,000 freshers, it has frozen lateral hiring.

The pandemic is expected to have a short-term impact on job creation during the current fiscal year, but the declining trend in job creation is likely to continue due to the IT sector’s changing business model, analysts said.

“Many large IT services companies are seeing budget cuts by clients in the US in retail and pharma sectors and that is likely to impact future demand to some extent,” said Eric Lobo, executive director of personnel search services at head-hunter Ray & Berndtson.

In fact, Lobo said, two major pharma brands are also mulling over strengthening internal IT teams hinting at a lesser budget for service providers.

Notwithstanding the temporary lull, need-based hiring would continue by these tech services companies. “Even amid Covid-19 I am optimistic about the sector,” said Chakraborty.





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