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Workplace
India’s top three IT companies have reported a reduction of 16,254 employees cumulatively in the third quarter of FY24, amid an uncertain demand environment. IT companies said they are deploying the huge number of employees recruited previously, thereby driving up utilisation rates in Q3.
However, HCL Tech is the sole outlier among these IT firms, which reported an increase of 3,617 employees for the quarter.
When asked about the declining headcount, HR heads unanimously said they would first put the existing workforce to use. The executives added that hiring will be resumed if and when demand picks up pace.
Comparatively, these four companies had reported a decline in the workforce by 21,213 in the second quarter, mainly driven by the above-cited reasons.
Reduction in headcount was the sharpest for Infosys, which dropped by 6,101 to 3,22,663 in the third quarter. Next in line was India’s largest IT services company TCS, whose employee count dropped by 5,680 to 603,305. Trailing them is Wipro, which reported a decline of 4,473 employees to end with 240,234 in the quarter ended December.
Tata Consultancy Services
Milind Lakkad, Chief HR Officer, TCS, said the company has made significant investments in the past few years. “(We are) continuing to leverage that investment today and driving business that way and not needing to hire more,” Lakkad said, while addressing a press conference after declaring the December quarter results.
Nonetheless, the company said it has commenced its campus hiring process for FY2024-25.
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“We are committed to hiring from college campuses and growing talent organically. We have commenced our campus hiring process for the next year and see tremendous excitement among freshers to join TCS,” Lakkad added.
Infosys
For Infosys, outgoing Chief Financial Officer Nilanjan Roy said that the company has a lot of headroom for utlisation levels to go up, implying that the company doesn’t need to hire currently.
Roy said Infosys’ comfort range for utilisation levels is between 84-85 percent. He said the company can increase employee deployment by taking more trainees on short notice.
“So our model is very flexed in terms of ability to recruit fast, train them fast, and put them on production. So in that sense, we are in a good space in terms of ability to capture any future growth (in demand),” Roy said.
India’s second largest IT services company will also skip campus hiring, Roy said.
Wipro
Bengaluru-based IT major Wipro started trimming its workforce in the third quarter of the last financial year after having added 577 employees in Q2FY23.
“We believe that we have enough capacity to grow, and as and when demand comes, we will continue to grow (our headcount),” said Saurabh Govil, chief human resources officer, Wipro. “Even now for certain skills, specific technology, we continue to hire.”
Among these four IT companies, Wipro was the only firm whose net utilisation rate, excluding trainees, decreased marginally to 84 percent from 84.5 percent in Q3.
Govil said the marginal decrease in utilisation rate was due to seasonal furloughs and holidays availed by employees.
HCL Tech
Bucking the trend in the IT sector, HCLTech’s net headcount addition has increased Q3, and was in line with the company’s plans to start hiring after two quarters of slowdown.
Fresher additions stood at 3,818 for the quarter, up from last quarter’s 3,630.
In Q2, HCL Tech said it has some unutilised capacity, but beyond a point, the company will have to start hiring.
HCLTech’s attrition in the last 12-month basis declined by 140 basis points sequentially to 12.8 percent in Q3. This is the lowest attrition for the company since the COVID-19 quarter in 2021.
An analyst that Moneycontrol spoke to said IT companies are utilising their respective bench strength and not hiring fresh talent as they do not have demand visibility.