Bengaluru: Cognizant Technology Solutions Corp., DXC Technology Co., Wipro Ltd and Tech Mahindra Ltd have reported that their workforce has shrunk in 2017, an event that has no parallel in the two-decade history of the information technology industry in India.
Notwithstanding that fact, the companies have denied that they have laid off employees in this period.
These four firms, which together employed 719,471 people on 1 January 2017, saw their workforce fall by 26,677 people to end the year with 692,794 people (see table). Cognizant, Wipro and Tech Mahindra together saw a net decline of 3,677 people, after having added over 55,000 people in 2016. DXC, which was formed last year from the merger of Hewlett-Packard’s enterprise-services division with Computer Sciences Corp., reported the largest decline in workforce, dropping from 178,000 people in January to 155,000 by the end of September, the latest quarter for which numbers are available.
Although Tata Consultancy Services Ltd, Infosys Ltd and HCL Technologies Ltd have managed to increase their workforce, the number of people let go by the largest companies is higher than the decline in workforce suggests as they all continued to hire young engineers.
These seven largest companies employed 1,404,656 people at the end of December. That compares with the 1,408,823 they employed in January, a net decline of 4,167 in 2017, after having added more than 103,000 people in 2016.
Until 2017, not a single large IT outsourcing company has ever seen its headcount decline, and starting 1996, year after year, for more than two decades, all companies managed to keep adding to their workforce until the industry hit a perfect storm last year.
These companies’ traditional approach of deploying armies of engineers to manage computers or offering customer support to clients and client-run businesses was getting commoditised and increasingly disrupted by the embrace of smart automation tools. Business from areas generally classified as social, mobile, analytics, cloud and Internet of Things—all of which is clubbed under the fuzzy word Digital—is on the rise, although it is still less than a fourth of total revenue at home-grown IT firms.
A fallout of this shift is that the world has become digital, and the IT outsourcing companies haven’t (at least, not enough), reflecting their under-preparedness in adapting to newer technologies. US President Donald Trump’s protectionist policies have also forced these companies to hire more Americans.
Since the industry now is the largest job creator, employing 3.9 million people, fewer jobs at the largest companies is worrying news not just for the companies but for the country as a whole.
Many experts feel that the industry will see a further reduction in headcount in the years ahead.
“The global IT and BPO services industry employs 16 million workers today. By 2022, our industry will employ 14.8 million—a likely decrease of 7.5% in total workers,” Phil Fersht and Jamie Snowdon, analysts at US-based HfS Research, an outsourcing-research firm, wrote in a 3 February note. “This isn’t devastating news—we’ll lose this many people through natural attrition, but what this data signifies is this industry is now delivering more for less because of advantages in automation and artificial intelligence.”livemint