Bengaluru, August 1: India’s $154 billion IT sector is now struggling. For the first time, three of the five largest IT companies saw their workforce shrink in the quarter ended 30 June.
The workforce shrink by 1,821 people out of 984,913 at the end of the June quarter.
This situation raises a question whether the Indian IT sector will be able to appoint 150,000 people in the current year according to Nasscom’s projection.
Tata Consultancy Services Ltd, the country’s largest software services firm, saw its workforce decline by 1,414 people to 385,809 employees at the end of June quarter.
Infosys Ltd saw a net decline of 1,811 people while Tech Mahindra Ltd, the fifth largest company, saw its workforce shrink by 1,713 people.
Only Wipro Ltd and HCL Technologies Ltd reported net additions to their workforce. Wipro saw 200 employees join the company on the acquisition of Infoserver and 1,000 to its workforce.
As IT companies start working on newer technologies such as cloud computing, automation tools they are fast moving away from a people-led model, which means they need fewer employees.
Finally, US President Donald Trump’s protectionist policies and embrace of automation tools by IT vendors have further forced most firms to re-look at their current workforce.
“What required 50 programmers, analysts or accountants five years ago can be done by a handful of smart thinkers and much smarter systems,” said Phil Fersht, CEO of US-based HfS Research.