IT services industry goes slow on fresh

recruitment
December 16, 2014 14:32 IST

According to sectoral body Nasscom, the IT and business process management

sector employs 3.1 million people, including around one million women.

The information technology services sector, after having remained Indias largest private
sector employer for decades, is set for a change.
Several big companies have begun to downsize operations and go slow on fresh hiring, as a
result of increasing automation.
Several multinational companies have downsized Indian operations. Three of Indias largest
IT services companies -- Tata Consultancy Services, Infosys and Wipro -- have either
remained slow in hiring in recent years, hinted at bottom fishing for workforce or
restructured senior-level staff.
According to sectoral body Nasscom, the IT and business process management sector
employs 3.1 million people, including around one million women.
At the end of July-September, TCS had a headcount of 313,757, while Infosys and Wipro
employed 165,411 and 154,297, respectively.
With automation having increased over the past few years, experts estimate an IT services
company requires only 13,000 employees for $1 billion revenue, half the number needed until
a couple of years ago.
The use of productivity tools and with a substantial part of the business going on the cloud,
most IT companies no longer require the number of people they once used to, said Krish
Lakshmikanth, founder and chief executive officer and chairman of Headhunters India.
The pace of hiring has been declining in the past few years and will definitely become slower.
At the fresher level, students will need to look at software products or e-commerce companies
for jobs because I don't think the IT services sector will be able to absorb students beyond the
top 200 colleges.
In 2012-13, Infosys had said it would hire 6,000 graduating students, a sharp drop from
19,000 the previous year.
For 2013-14, the company pegged hiring at 15,000-16,000, a pale shadow of 50,000 used to
take every year during its heydays.
Wipro does not share annual hiring figures but Chief Executive Officer T K Kurien has said
the company aspires for a high growth level like that of TCS.
But with a lower headcount. Large numbers of people are the biggest worry for us because
we believe that at some time, you will hit an upper limit. So, our target is to reach good

performance but with the highest level of automation, Kurien had said in an earlier interview
to Business Standard.
Despite slow hiring by Infosys and Wipro, Indias largest IT services company, TCS, has
continued recruiting in bulk from engineering colleges all these years.
Last week, sources said, TCS was undergoing a restructuring exercise, expected to finish by
February.
All verticals have been asked to identify senior staff above the rank of consultant -- senior
consultant, principal consultant, vice-presidents -- who have not been very productive.
Middle-management trimming could become the norm for several other companies, experts
said.
Lakshmikanth added mid-level employees overseeing operations were facing redundancy
from automation.
I remember, almost a year ago, several CEOs of the IT services industry were openly
discussing if they needed people with 20-25 years of experience because people with 10 years
experience are capable of handling these responsibilities, said Sudin Apte, research director
and chief executive officer at Offshore Insights.
Either senior-level skills do not matter now in the changing nature of technology or the
senior level is more into management of client relations and technical expertise is required at
less experienced levels.
TIMES ARE A-CHANGIN. . .
Infosys' net headcount addition in FY14 at 3,717 employees vs 6,694 in FY13
Wipro's net headcount addition in FY14 at 241 employees v/s around 10,000 in FY13
Experts say IT services company now needs 13,000 employees per $1 billion revenue, half
of around 26,000 needed till a couple of years ago
Earlier in 2014, IBM started restructuring process, which would see 15,000 jobs being cut
globally, including in India, Brazil and the European region
Yahoo! served pink slips to undisclosed number of employees at its Bengaluru
development center
Wipro CEO says company aspires to grow as fast as TCS, but without as many employees

Source:
http://www.rediff.com/business/report/tech-it-services-industry-goes-slow-onfresh-recruitment/20141216.htm