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IT industry's plan of creating more jobs not rooted in reality: Head Hunters

A close examination of Infosys hiring forecast of 20,000 translates into a hiring of approximately 9,000 in India, the executive search firm has said
India TV Business Desk New Delhi June 06, 2017 16:51 IST
India TV Business Desk

The recent attempts by IT companies such as Infosys and TCS to ease the growing concerns around the industry's capabilities to be a net employment generator, are not rooted in reality, a prominent executive search firm Head Hunters India has said, referring to the announcements by the firms of hiring 20,000 professionals each.

"Recently, domestic IT giants, Infosys, TCS, announced that they will be hiring 20,000 professionals each, thus apparently reducing the tension about IT industry's capabilities to be a net employment generator. A closer examination reveals that it is not rooted in reality," The Head Hunters India Founder Chairman Kris Lakshmikanth told PTI.

According to Lakshmikanth, a close examination of Infosys hiring forecast of 20,000 translates into a hiring of approximately 9,000 in India. The calculation is based on Infosys CEO Vishal Sikka’s public announcement of 10,000 hires in USA and another 1,000 approximately in rest of the world.

The Donald Trump administration’s protectionist stance and overhaul of the H1B visa regime has prompted IT companies to move to local hiring, creating a sense of uncertainty in the minds of IT professionals back home in India. On May 2, Sikka had announced that the IT giant will hire 10,000 Americans in the next two years and open four centres in the US in a bid to woo Donald Trump administration, which has been critical of outsourcing firms for unfairly taking jobs away from US workers.

Also Read: White House claims 'political victory' as Infosys announces move to hire 10,000 US workers

The 10,000 people that will be hired will include experienced technology professionals and recent graduates from major universities, and local and community colleges. Infosys said it will also train them on key competencies such as user experience, cloud, artificial intelligence, big data and digital offerings, as well as core technology and computer science skills.

Lakshmikanth said that with plans of hiring 20,000 people, the projected gross number of people under employment will approximately increase from 2,10,000 as on April 1, 2017 to 2,30,000 as on April 1, 2018.

But, after taking attrition of 12 per cent for Infosys, then projected manpower strength as on March 31, 2018 will be 2,02,400, he said.

"Since the bulk of Infosys manpower is in India, the net strength of Infosys in India will come down by about 10,000 people from the levels of April 1, 2017," he said.

Talking about TCS, as on April 1 this year, it has a headcount of 4,00,000, and with the announcement of 20,000 hiring this year, it will increase to 4,20,000, but the projected net hiring as on April 1, 2018 will plunge to 3,78,000 due to 10 per cent (42,000 people) attrition, Lakshmikanth said.

"So, it looks like that the IT giants between them will have a net reduction in jobs," he said.

The trend of lower employee additions and shifting of workload away from human beings on to 'intelligent computers' is not confined to TCS. Other IT biggies such as Infosys and Cognizant have also been working on using artificial intelligence to replace humans, Lakshmikanth said.

Large IT companies such as Wipro, Infosys and Capgemini are believed to be considering layoffs on a scale larger than what was witnessed during the economic slowdown between 2008 and 2010. Middle to senior level employees are likely to take the first hit while the junior workforce could also see a shakeup towards the latter half of the year.

"We have to live with automation, digital and immigration challenges," Lakshmikanth added.

Talking about this year's outlook, he said that the Indian IT industry is likely grow 8-9 per cent in FY2017 and could grow at the same pace or accelerate in FY2018.

"Expect divergence in performance of companies depending on the mix of business (run versus change) and ability to capitalize on the digital opportunity," he said.

(With PTI inputs)