Drop in headcount was due to changing client requirements: Tech Mahindra

Company says it's committed to hiring, added 1700 staff over past two months

Tech Mahindra, India’s fifth largest IT services company has attributed the sharp fall in headcount in FY18 to a massive shift in client technology requirements over a short duration, though the Pune-headquartered company said it has started stepping up hiring again.

The company, which reduced headcount by a little less than 5000 last fiscal hired around 1700 employees in the last two months alone.

“With the current technological availability, we are looking at exponential growth in revenue per employee. In the past six months, we have seen a huge change in technology requirements. Customers also want automation for greater efficiency and consistency of results,” Harshvendra Soin, the newly appointed Chief People Officer of Tech Mahindra told Business Standard. The company is seeing massive demand for technologies in areas like artificial intelligence, blockchain and augmented reality over the past year, he added.

In FY18, Tech Mahindra saw its software headcount (not including BPO) reducing by 9966 even though in the preceding year, the company had added a little over than 10,000 software professionals to its workforce. Between Q4 FY17 and Q1 FY18, the software headcount of the company dropped by 3407. This was also a period when Tech Mahindra was plagued by multiple allegations of layoffs from their offices across the country prompting many disgruntled employees to turn to the Labor Commission for respite.

But the company is, however, says that it would continue to hire people as they see a need for talent across various domains. “We have added about 1700 people on net basis over the past two months. It means we are seeking talent to supplement our growth and we believe we will attract a lot of good talent across industries,” Soin said. In this situation, people who skill themselves in new age technologies and agile processes have a lot to gain, he quickly adds.

Last year, Tech Mahindra issued wage hikes only for employees with up to six years of experience. In FY19, the company has announced to effect compensation hike over the first two quarters which is expected to impact its profit margins negatively. However, it plans to mitigate the impact of increased automation and an optimal mix of offshoring, outsourcing and near-shoring this year. The company, however, declined to spell out the quantum of hikes it plans to offer this year. Most of its peers have already announced to offer a salary hike of up to 6 per cent to their offshore employees this year.

“On our part, we are continuously investing in the right people and technology. We have already reskilled roughly 70 per cent of our employee base. Hiring will now is more around new age technology which is the company strategy going ahead,” Soin said.