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Jobs are falling in India’s once-booming IT sector, but that has helped the industry improve per-employee productivity and control attrition. Infosys on Friday claimed it managed to keep its attrition rate low in December quarter, thanks to salary hikes and higher variables.
On Thursday, industry leader TCSBSE -0.56 % reported just 3,657 employee addition in the first nine months of this financial year on a net basis, signalling an 85 per cent year-on-year drop in hirings, but reported a drop on attrition and improvement in productivity. TCS had recruited 24,654 employees in the same period last year.
Infosys reported higher gross job additions in December quarter at 12,622 employees, which was higher than 10,514 employees it had added in September quarter and 9,120 additions made in the year-ago quarter. But analysts said the higher job additions could be to stabilise the business following strong attrition that the company witnessed through the past year amid chaos and a major rejig at the management level.
The TCS numbers, showing a slowdown in hirings in what was once a jobs-creating machine in IT sector, best reflected the job squeeze in India’s IT sector. For the first six months of the ongoing financial year, top six Indian IT companies saw their workforce shrink by 13,402 compared with an addition of 60,240 jobs in the same period a year earlier.
Data suggests the total headcount at Infosys, the second largest IT company, rose to 2,01,691 at the end of December quarter from 1,99,763 at the end the same quarter last year. At the end of September 30, 2017, the company had 1,98,440 employees.
The Bangalore-based company, which welcomed its new Chief Executive Officer and Managing Director Salil S Parekh only last week, beat Street estimates to report a 38 per cent sequential growth in December quarter profit at Rs 5,129 crore compared with Rs 3,726 crore reported for the previous quarter.
Parekh is the second non-founder executive of the $10 billion IT behemoth after Vishal Sikka, the first non-promoter CEO who quit in August following a spat with its co-founders over governance issues.
“During the quarter, we provided compensation increases and higher variable payouts to our employees. Our investment in employees continues to deliver results as reflected in lower attrition,” Infosys COO Pravin Rao said in the BSE filing.
On a net basis, the company added 3,251 employees — including sales & support staff, trainees and professionals. Some 113 employees left the company in September quarter and 66 in December quarter last year. Overall, annualised attrition fell to 15.8 per cent in Q3FY18 from 17.2 per cent in Q2FY18. On a consolidated basis, it fell to 18.7 per cent in the third quarter from 21.4 per cent in the September quarter.
TCS reported its slowest incremental revenue increase in four quarters for the September-December period, as its bread and butter BFSI business showed negative growth, hurt by persistent weakness plaguing the sector for more than a year now. The segment, which heavily depends on the IT spending capacity of big banks and financial services companies in the US, has been an area of concern for India’s largest software services firm for some time.
Ajoyendra Mukherjee, executive vice-president and global head for human resources at TCS, however, said the number shortfall was largely because the company has stopped advance hirings. “A year prior, we were building capacity in advance. We made 40,000 campus offers. We made a gross addition of over 78,912 and net addition of 33,000-34,000. We are now looking at just in-time hiring,” he explained.
Company’s CFO V Ramakrishnan, however, tried to depict a rosy picture, saying “this is the time for a lot of optimism rather than pessimism on the IT job front, in view of the growth revival seen across sectors
“The way investments are being made in the digital space and technology and the number of changes happening, it gives exciting opportunities to young engineers to embrace this and learn more and more. We are quite optimistic on those fronts and I think we should really look at it with a lot more positivity,” he said.
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