IT employees had a good 2014-15, with frontline outsourcers such as Infosys hiring aggressively. Infosys increased its net headcount by 16,000 during 2014-15, after hiring just 3,000 new employees the previous year.
TCS could have easily overhauled its 2013-14 net additions of 24,000 employees in the last fiscal had it not limited new hiring to just 1,031 employees in the March 2015 quarter. India's biggest outsourcer ended 2014-15 fiscal year with a net addition of 20,000 employees.
Overall, FY15 turned out to be pretty good in terms of new job additions for the IT/BPO sector. Domestic brokerage Nirmal Bang, quoting data from the Ministry of Labour and Employment, said the IT industry hired nearly 2 lakh employees in the first nine months of FY15 as compared to 80,000 employees in 2013-14 and 92,000 employees in 2012-13.
But the spurt in new job additions in the IT sector may be short-lived with most analysts predicting a slowdown in hiring momentum in the coming years.
Consider Wipro whose CEO TK Kurien has reportedly told investors that the company will cut down one-third jobs over the next few years. India's third-largest outsourcer expects its headcount to come down by about 47,000 in the next three years. Wipro employed 1.58 lakh employees as of March 31, 2015. (Read)
The development at Wipro should not come as a surprise. Infosys, which aims to generate $20 billion in sales by 2020, is counting on increased employee productivity to achieve the ambitious target.
"We are aspiring roughly in the ballpark of 2.5 lakh employees for using $20 billion in revenues as opposed to 1.75 lakh to 1.80 lakh employees for using $9 billion in revenue right now," said Infosys CEO Vishal Sikka on Friday.
Infosys expects the productively of its employees to go up from $52,500 now to $80,000 by 2020.
Wipro and Infosys are not the only companies looking to increase revenues without hiring more employees. Most IT companies are moving towards greater automation and non-linear models, where revenue growth is delinked from employee additions. Many IT companies now hire "just-in-time" because of abundant labour and predictable demand.
Overall Jobs Growth to be Slower
New job creation accelerated in the first nine months of 2014-15 fiscal year, with more than 1 lakh jobs added to the economy in each of the first three quarters of FY15, Nirmal Bang said. In all, nearly 5 lakh new jobs were added between April and December 2014, 50 per cent higher than a year ago, it added.
However, the brokerage says such strong job gains are unlikely going forward. A RBI survey has found that the number of people expecting higher employment gains in the June quarter has declined; the percentage of consumers expecting higher income a year ahead has also declined, the brokerage says.
"These surveys therefore indicate that job gains are unlikely to be as strong in FY16 as in FY15. Further, with consumers growing more cautious on their employment and income outlook, they may choose to consolidate this year by keeping their spending in check," said Nikhil Gupta of Nirmal Bang.
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