Latest IT hiring shows muted growth in the industry

By SiliconIndia   |   Friday, 25 January 2008, 12:26 Hrs
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Bangalore: If the quarter results are anything to go by, the latest net addition headcount numbers of the top six Indian IT services companies show a certain muted growth in their business, reports The Economic Times.

The hiring numbers, as a percentage of the total headcount, for the last three years in the December quarter show that companies like TCS, Wipro, Satyam and HCL are showing declining growth rates. In absolute net headcount terms, TCS and Wipro have shown a drop in hiring, while it has increased for Infosys, Cognizant, Satyam and HCL.

As these IT service companies operate under the linear business model where increasing revenue comes through an addition of headcount, there is no room for an argument that the companies have increased their utilization levels leading to a muted hiring scenario, say analysts. This could actually mean that companies are more cautious in their outlook of future business, especially in the light of a possible U.S. economic slowdown.

However, Avinash Vashistha, CEO, Tholons says, "This is likely to be a one-time affair and there would definitely be more hiring by the end of the December quarter in 2008."

At the same time, hiring of freshers for the coming fiscal by IT majors has increased. While Infosys has made 18,000 offers for next fiscal, TCS stands at 22,000 and for Wipro it is 17,500.

"Campus hiring has gone up in the last couple of years, especially this year," says Gautam Sinha, CEO, TVA Infotech.

Kris Laxmikanth, MD of The Head Hunters (India) says, "Companies are looking at more campus hires to offset costs. They are lacking in adequate facilities to train these freshers, including faculty resources. So they are going in for staggered hiring this year."

Though linearity of the business model is very much evident in these IT services majors, many companies are exploring the non-linear models. Wipro, for example, is looking at generating 20 percent of its revenue through non-linear model in the next three years.

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