The COVID-19 pandemic and the resultant lockdown has caused the economy to dwindle. Many companies are resorting to pay cuts, lay-offs and halting the bonuses and hiring.
At Tech Mahindra the new hiring has been cut sharply whereas Infosys added 40% fewer new employees to their roster last financial year. The only IT major that isn’t crumbling seems to be Wipro.
Read to find out more…
A Drop In New Hires!
Across India’s top 5 IT firms including Tech Mahidnra, Infosys, HCL Technologies, Tata Consultancy Services (TCS) and Wipro witnessed a drop of 27% in job creation.
Tech Mahindra showed the highest dip of 49.8% in the new hires, followed by Infosys with a fall of 40.67%.
HCL Technologies cut its new hires by 28.2% with TCS at its tail with a drop of 17.45%.
Wipro’s dip in hiring was only a marginal 0.36%. However, during its fourth-quarter earnings call, Wipro also disclosed that it may ask employees to go on leave without pay should things get worse.
Overall, India’s top five IT companies — including Tata Consultancy Services (TCS) and HCL Technologies — added 66,500 employees in the last financial year as compared to 87,060 in the previous year.
New Hire Dip Not Due To COVID-19 Pandemic?
Industry experts suggest that the fall in job creation isn’t due to the coronavirus pandemic, which only brought up its head in the last week of March, but due to the overall shift in how India’s IT majors are operating.
Harshvendra Soin, the Chief People Officer at Tech Mahindra, told ET that new-age technologies like artificial intelligence (AI) and automation are enabling delivery models which are no longer linear to the number of people. He explains that reduction in the requirement for certain employees is because mundane tasks have been automated and the ones that remain can now focus on solving business problems.
Infosys and Tech Mahindra, which saw the biggest drop in new hires, have reported higher attrition rates hitting nearly 20%. Infosys Chief Human Resources Officer (CHRO) Pravin Rao during the fourth-quarter earnings call said, “We will hire only on a need basis and any incremental hiring will be only from a skill perspective.”
TCS is also thinking of shifting to a 25/25 operating model by 2025, wherein only 25% of its employees will be required to be in the office at a time and only spend 25% of their time physically at their desk. This will make work from home become the ‘new normal’.
This comes as good news for IT companies as they can serve the same demand with fewer employees and can help their cost benefit. However the result doesn’t bode well for India’s unemployed and the number is increasing by the day. The country needs to generate at least 10 million new jobs a year in order to utilise its demographic dividend.
The companies have promised to honour any campus hire agreement they have made this year. However, onboarding the new hires may be a slow process with the nationwide lockdown in place.
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