IT firms reduce headcount by 3,000 in Q1

First sequential decline in a decade as 8 of top 15 software firms report drop in manpower

For the first time in a decade, information technology (IT) companies reported a sequential decline in their employee strength in the April-June 2017 quarter. The combined headcount of the country’s top 15 listed IT companies was down around 3,000 employees, compared to the number at the end of March this year.

The squeeze is widespread, with eight of the 15 companies in the Business Standard universe reporting a quarter-on-quarter decline in their employee strength, during the first quarter of FY18.

In all, around 1.12 million people were working for these top 15 IT companies at the end of June 2017 quarter, down from around 1.123 million people at the end of March this year ( See chart).

Some of the companies reporting a decline in head count include Tat a Consultancy Services( T CS ), Info sys, TechMahindra, OracleFinancial Services, Mph as is and Persistent Systems, amongothers. The companies that reported net additions to their head count last quarter include Wipro, HCLTechnologies, Hexaware, Mindtree, andKPITCummins.

The analysis is based on the results presentation by various listed companies and their annual reports. The sample includes the figures of the erstwhile Sat yam Computer, which is now part of Tech Ma hind ra after its merger with Ma hind ra Sat yam.

IT companies, including Wipro, Infosys, HCL Technologies, Persistent, Tech Mahindra and Hexaware, declined to comment on the development.

Among individual companies, Tech Mahindra witnessed the biggest contractioninitsheadcountlastquarter, followed by Infosys and TCS. Tech Mahindra’s employee strength reduced by around 2,000peopletoalittleunder116,000inthe first quarter at the end of the last quarter. Infosyssawanetdeclineof1,811peoplein its headcount, while TCS reported 1,414 decline in its staff strength during the last quarter. Ajoyendra Mukherjee, the global head of human resources at TCS, said that the gross hiring of employees would be lower in fiscal year 2018 than in the last year across geographies, while speaking during the company’s first quarter result presentation. In contrast, HCL Technologies was the single-biggest hirer in the last quarter, adding nearly 1,800 people to its staff strength last quarter, followedbyWiprowith1,309morepeople.

Experts blame the decline in staff to the ongoing slowdown in the industry and pressure on profit margins. “Revenue and volume growth have almost come to a halt for most IT services companies. Besides, margins are falling steadily, forcing companies to change their business practices, leading to elimination of many jobs that involve repetitive tasks. This is showing in the shrinking headcount numbers,” said Rituparna Chakraborty, executive vice-president and co-founder, TeamLease Services.