Unmasking the trend: TCS, Wipro, HCLTech, and Infosys witness headcount shrink

As the Q1 results are announced, the industry has witnessed an unexpected trend of headcount shrinkage. There are several other factors that have contributed to this phenomenon, ranging from strategic business decisions to the impact of remote work dynamics.

Today, we bring you a piece of insightful information and the reasons behind it through this interesting piece of information. Let's delve into the key highlights and explore the implications.

Tech giants navigating through unprecedented times

Tech giants like TCS, Wipro, HCLTech, and Infosys are all on the list. Recently, HCLTech and Wipro witnessed their headcount shrink by over 11,000 people during the quarter that ended in June.

Tata Consultancy Services (TCS) with its 6.15 lakh-strong workforce added just 523 employees while Wipro as well as HCLTech both saw huge declines in headcount. Wipro ended the quarter with 8,812 fewer employees than last quarter, while HCLTech saw its headcount fall by 2,506.

HCLTech saw its headcount dip for the first quarter since Q1FY21, ending with 2,506 fewer employees than at the end of the previous quarter.

IT major Wipro’s net employee addition fell 69.6% to 13,793 employees in just-concluded FY23 from 45,416 in FY22, amidst global slowdown woes affecting demand for the company and sector at large.

Wipro’s headcount has been on a decline for the last two quarters. In Q4, its headcount was down by 1,823 employees, and Q3 too had seen a decline of 435 employees. Currently, its total employee count stands at 2,56,921. Precedingly, the closing headcount in FY22 stood at 2,43,128 and at 1,97,712 in FY21.

Infosys also reported a slight decrease in its workforce base. While the precise causes are yet unknown, the company said that they are concentrating on staff optimization to fulfill shifting consumer needs successfully.

The attrition rate at Infosys decreased to 20.9% in the December quarter of FY23 from 24.3% in the previous quarter. Despite this, the attrition rate at TCS decreased to 20.1% from 21.3% in the previous quarter of FY23.

Understanding the implications

As the headcount shrinkage became a major issue, it is crucial to analyse the situation and different perspectives to understand why.

So when TechGig spoke with industry experts, they revealed several interesting points. Let's have a look at them.

1. Adaptability:? Businesses were forced to rethink operations due to the pandemic, which has led to a greater focus on digital transformation, while tech giants are reevaluating their workforce requirements to ensure agility and adaptability in their ever-changing industry.

2. Upskilling: Most tech companies are now doing their homework on skill development to align with emerging technologies such as AI, cloud computing, and cybersecurity. Now the focus is shifted to the upskilling of the employees which might be leading to a redistribution of the workforce.

3. Remote work in demand: Almost every company has asked their employees to return back to the office. This might also be a reason for headcount reductions. Apart from this, companies have been able to reinvent their talent pool by recruiting people from various geographical regions.

4. Cost cutting due to global economic uncertainty: After the pandemic, the global economy is facing an unpredictable environment and therefore many companies have taken a conservative approach to cost management, which may have affected their recruitment decisions.

The way forward

At first, the headcount reduction in major IT companies was seen as a concern by experts but when we see a broader picture, it seems a strategic decision to optimise operations in a more effective way. And when it comes to employees, There are several steps that can be taken:

1. Keep yourself updated with market trends and industry demands

2. You should always enhance your skillset and knowledge through courses, certifications, and workshops

3. Take on new responsibilities and showcase your commitment to achieving the goal

4. Start building a professional network and maintain relationships within your industry

5. Be flexible and open to new roles or industries that align with your skills