Employee count shows Indian IT biggies hired fewer people in March quarter

Topics Indian IT firms | IT firms | TCS

Employees in the information technology (IT) sector have already started feeling the heat of the impending slowdown because of the pandemic.

In the quarter ended March 31, Indian IT firms like TCS, Infosys, and Wipro saw tepid addition of employees, as compared to the last eight quarters. While market leader TCS showed a marginal rise in its employee count during the quarter, Infosys and Wipro witnessed a drop in their staff count on a sequential basis.

In Q4FY20, the employee count of Infosys dropped by 1,083 to 242,371 while that of Wipro fell by 4,432 to 182,886 sequentially. Only market leader Tata Consultancy Services (TCS) saw a net addition of 1,789 to 448,464.

An analysis of the headcount in these companies — for the last eight quarters — showed that Q4FY20 was one of the lowest as far as net addition was concerned.

 For instance, Infosys added 906 in Q4FY20, which was one of the lowest as compared to the decline in its employee base (sequentially) during the fourth quarter of the previous financial year.

 For Wipro, the fall in headcount was the highest in the just-ended quarter, as the IT services firm saw a dip in employee count by 1,954 in Q4FY20.

 However, data showed a slightly different story for TCS, which added more than 1,700 employees in the March 2020 quarter. However, the Mumbai-based IT firm had seen a drop of 4,063 employees in the previous quarter (Q3FY20). 

“Usually, companies try to tighten their belts in the fourth quarter of every financial year in a bid to improve efficiency. In that sense, it was no different last financial year. Further, the anticipation of a slowdown, on account of Covid-19, has also played a role in hiring,” said Aditya Narayan Mishra, director and chief executive officer of CIEL HR Services.

 The top three IT firms have already announced a deferment in salary increments and promotions to conserve cash, as they gear up to battle the crisis triggered by the pandemic. However, all of them have said they will honour their commitments as far as job offers were concerned, though they will go slow on new hiring in Q1 and Q2 of FY21.

According to HR experts, hiring in the first quarter of the current financial year is likely to be 10-20 per cent less compared to last year. “While we expect a dip in hiring across sectors, IT hiring will depend on how the US recovers from the crisis. If establishments open up in the US by May, we may see some momentum,” said Mishra of CIEL HR Services. The Indian IT industry may see revenue growth of close to 3 per cent in the current financial year, as compared to more than 7 per cent during the last financial year.

While large IT players are relatively better placed, many mid-tier firms are expected to see a contraction in revenues in FY21.

IT sector revenue growth may hit decadal low 

The Indian IT sector is staring at a revenue growth sliding to a decadal low of up to 2 per cent and an impact on profitability owing to narrowing of margins due to the Covid-19 pandemic, a report said on Friday. The companies will lose out on new deals, which will compromise future revenues, and also face reverses on the exiting ones, which may be renegotiated as their overseas clients face difficulties due to the lockdowns, domestic rating agency Crisil said in the report. The $97-billion IT sector is one of the largest service exporters. PTI

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