TCS, Infosys, and Wipro Witness Drastic Workforce Reductions

TCS, Infosys, and Wipro Witness Drastic Workforce Reductions (Image Source: iStockphoto)

For over twenty years, TCS, Infosys, and Wipro have been the leading recruiters of engineering and technology talent. However, in the financial year ending this March, the combined headcount of these tech giants plummeted by nearly 64,000 employees. According to The Times of India report, early forecasts for the current financial year also paint a bleak picture, with Infosys expecting a modest revenue growth of 1 per cent to 3 per cent, while Wipro anticipates a potential revenue decline of 1.5 per cent or, at best, a marginal increase of 0.5 per cent in the June quarter.

Challenges Facing Engineering Graduates

These forecasts spell trouble for engineering graduates. Peter Bendor-Samuel, CEO of IT consulting firm Everest Group, attributes the headcount reductions to the aftermath of excessive hiring during the Covid boom and the ongoing contraction in industry demand. Despite a thriving US economy, concerns about a potential slowdown or recession are deterring American enterprises from making substantial IT investments, as noted by TCS CEO K Krithivasan.

The Rise of Gen AI in IT Staffing

Phil Fersht, CEO of US-based IT advisory HfS Research, suggests that Gen AI is also influencing IT staffing demand. Fersht reveals that a major US enterprise has identified a significant reduction in IT staff requirements by implementing large language models (LLMs) for application testing. With a substantial portion of revenues for Indian IT service providers reliant on testing and quality assurance, Fersht predicts that up to a million employees supporting routine-based tasks could face elimination in the next few years.

Shift towards AI and Automation

While the current IT services portfolio remains manpower-intensive, Saurabh Govil, Wipro’s Chief of HR, acknowledges the long-term potential for AI to reduce headcounts. Govil suggests that as AI adoption increases, there may be a divergence in headcount requirements.

Opportunities in Global Capability Centres (GCCs)

The report added that amidst the workforce downsizing in traditional IT firms, there is a silver lining for job seekers. Global capability centres (GCCs) of multinational corporations (MNCs) are bucking the trend by actively hiring.