At a time when Indian IT companies’ commentaries have been muted about their hiring plans for this fiscal, they have been adding employees inorganically. As per publicly available numbers, IT companies have inducted at least 5,550 employees on their payroll inorganically, which analysts say, could go over 8,000 if other deals, whose numbers are not in public domain, are taken into account.
The addition in their headcount is being done either through rebadging deals or through acquisitions they are making. Rebadging is the transfer of employees from clients to IT vendors and many times are part of the deals that IT companies bagged from clients.
As per Jefferies, the Indian IT services firms saw a decline of 22,000 in their net aggregate headcount in the first quarter of FY24, compared to a decline of 9,000 in their net aggregate headcount in March quarter of FY23.
Pareekh Jain, founder of Pareekh Consulting, said, “If we do the math and take into account all the undisclosed numbers of employees rebadged in recent deals and acquired in recent acquisitions, then this would cross more than 8,000 employees. IT companies, by inducting employees who are already skilled, are augmenting their capabilities in different geographies, industries and services. Inorganic acquisition of employees gives them ready-made and bespoke skills.”
Take the case of Infosys and Danske Bank deal where the IT giant in June said that it will acquire 1,400 employees of the bank’s IT centre in India. Similarly, it is adding another 400 employees from its latest deal with Liberty Global.
HCLTech this week also announced inducting 400 employees from its deal with Cloud Software Group. In August, the company completed the acquisition of the entire 100% stake in German automotive engineering services provider ASAP Group for $279 million. ASAP Group has 1,600 employees across different locations.
UST, this week acquired a Dallas-based telecom engineering firm, MobileComm and integrated more than 1,300 employees to strengthen its telecommunication practice. Similarly, last month Xoriant acquired Thoucentric, a Bengaluru-headquartered specialised consulting firm along with its 450 employees. Even other midcaps like Happiest Minds, Mphasis, Sonata and LTTS have made acquisitions this calendar year.
Early this fiscal, Happiest Minds had said that it will hire 1,300 employees in FY24. But last month, Venkatraman Narayanan, MD and CFO, Happiest Minds, said, acquisitions also add to their total headcount. “For example, last March, we added 500 people to the family from Madurai-based SMI that was acquired by us.”