India’s third largest IT services exporter Wipro has decided to let go its 350-400 employees as part of the appraisal process, which the company termed as a part of plan to align its workforce with business objectives The IT major at the end of third quarter of FY17 had a total headcount of 179,129. It is not clear which divisions of the company will be affected the most.In response to a query from FE, Wipro said, “Wipro undertakes a rigorous performance appraisal process on a regular basis to align its workforce with the business objectives, strategic priorities of the organization, and requirements of our clients. This systematic and comprehensive performance evaluation process triggers a series of actions such as mentoring, retraining and upskilling. The performance appraisal may also lead to the separation of some employees from the company and these numbers vary from year to year.”
Wipro has faced growth challenges in the last two quarters of FY17 recording flattish growth and is also expected to end the current fiscal with a revenue rise in single digits. The pace of employee addition for the Indian IT industry has in fact slowed down over the last couple of years driven primarily by two factors: a slowing growth rate which has come down to single digits and an increased pace of automation which has reduced the dependance on employees.
Infosys, for example, made a net addition of just 6,320 employees during the course of FY17 to reach a total headcount of 200,364. In comparison, during FY16 the company had a net employee addition of 17,857. Infosys recorded a growth rate of 7.4% in US dollars for FY17.In the case of Tata Consultancy Services (TCS), the employee addition over the last two fiscals has been relative stable. At the end of FY17, the company made a net employee headcount of 33,380 which was marginally lower than 34,187 at the end of FY16. TCS currently has total headcount of 387,223 and its growth rate has once again remained in single digits during FY17 at 6.2%.
The slower pace of employee addition by the large Indian IT companies is also reflected on the overall industry. According to Nasscom, the total number of people employed by the industry stood at 3.9 million for FY17 at an annual growth of 5%. In comparison, for FY16, the growth in employee addition stood at 6%. “Gentle deceleration continues as industry focuses on productivity and automation,” Nasscom said.The Indian IT industry is also expecting to position itself as the digital transformation partners for global businesses. This is expected to open up multiple areas of work for the industry and will have a significant impact on existing service lines.