At a time when top IT companies are seeing a reduction in their net headcount, there is a divergence between tech workers and their sales counterparts when it comes to the rate of headcount drop. While large IT companies saw tech workers’ numbers fall faster, their sales employees’ headcount reduced at a slower pace and in some cases grew, in the first half of FY24.
For instance, during March-ending quarter of FY23, Infosys had 324,816 software employees. At the end of Q2 FY24, the number was down 4.4% to 310,375. In contrast, during the same period, sales headcount fell by just 0.15% — from 18,418 during March quarter to 18,389 during the September quarter.
HCLTech in the March quarter had 211,445 technical employees. At the end of Q2 FY24, it had 206,745 employees – a 2.2% fall in six months. In contrast, the sales and support employees fell by just 0.72% in the same period — from 14,499 to 14,394.
Wipro in the March-ending quarter had a total employees of 2,58,570. At the end of Q2 FY24, it had 244,707 – a fall of 5.3% in the six months. In the same period, the company saw its sales and support employees falling by 1.3%. Wipro in the March-ending quarter had 16,999 sales and support staff. By the end of Q2 FY24, it had 16,778 sales and support personnel.
Similarly, Tech Mahindra had 83,789 software professionals during the March quarter which came down 81,200 during the September quarters, a fall of 3%. However, sales and support staff declined by just 1% from 8,509 in March quarter to 8,419 at the end of September quarter.
In the case of LTIMindtree, the decline in software professionals was of 2.5%,whereas the number of sales professionals went up by 23%.
Pareekh Jain, founder, Pareekh Consulting, said, “In the last quarter, a lot of large and mega deals have come to Indian IT service companies. That shows that sales personnel are quite busy this season and are proving themselves indispensible. In contrast, IT and software employees have been underutilised in recent past. Companies are pulling up their utilisation ratio”.
Macro uncertainties have made sales cycles elongated, with increased scrutiny on project approvals by clients. Therefore the importance of sales work has increased significantly of late.
Peter Bendor-Samuel, CEO, Everest group, said, “It is important to remember that all these firms went into hiring spree (software professionals) last year. They ended up building excess capacity hoping for a continued accelerated growth of the industry they were seeing then. As the macro challenges started impacting services industry demand – discretionary pull backs, delays in project ramp ups, pricing pressures – they got left with an overstaffed situation”.
On sales headcount, he said that due to the challenged demand, the services business dynamics is more about building strong client relationships, account intelligence, opportunistic sells and aggressive competition, which are required to sell in a tough market and save existing accounts.