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<ul><li>The looming fear of tech <keyword id="6357067" type="General" weightage="20" keywordseo="Layoffs" source="Orion">layoffs</keyword> in India rose again, after <keyword id="6370971" type="General" weightage="20" keywordseo="Accenture" source="Orion">Accenture</keyword> announced 19,000 job cuts on Thursday. </li><li>Accenture’s earnings are often seen as an indicator of the Indian IT sector’s performance. </li><li>Indian IT companies froze hiring in Q2, with hiring declining by 96% when compared to preceding 7 quarters. </li></ul>In spite of the many startups laying off employees since last year, the Indian IT sector has so far remained resilient. However, the recent announcement by global IT major Accenture that it will cut 19,000 jobs has brought back some of the fears again. “What we have been seeing for the last several quarters is a focus on cost with shorter return time. Everyone wants to be more resilient and [have] lower costs,” said Julie Sweet, CEO, Accenture in a post-earnings conference call. Accenture has opted for retrenchments to drive resilience. “We are trying to cut structural costs so that we are in a better position. We are trying to mitigate the cost by driving efficiency,” Sweet added. Even as the big techs of Silicon Valley chopped thousands of jobs, top Indian IT companies gave no such indications. Yet, in the last few months, they have put sudden brakes on hiring. According to a<a href="https://www.businessinsider.in/business/corporates/news/hiring-by-it-cos-down-96-in-q3-compared-to-preceding-7-quarters-even-as-attrition-cools/articleshow/97023873.cms"> Business Insider India analysis</a>, hiring fell by 96% in the December quarter compared to the preceding seven quarters. Out of the big four IT companies, <keyword id="6357150" type="General" weightage="20" keywordseo="TCS" source="Orion">TCS</keyword> and Wipro actually reported a decline in their headcount during the quarter. Going forward, Indian IT companies could look at Accenture’s layoffs as a ‘blueprint’, says JM Financial. “We see such action as necessary for India IT players as well as a slower growth and falling inflation makes utilisation and pyramid correction difficult levers to pull,” said a report by JM Financial. <cmsannotation type="cmsannotation" annotationid="Other levers available to optimise costs" comment="subhead" text="Other levers available to optimise costs">Other levers available to optimise costs</cmsannotation> Apurva Prasad, vice president of institutional equity research (IT sector) at HDFC Securities told Business Insider India that there are other levers instead of layoffs which Indian IT companies can use to achieve cost optimisation. “There are multiple levers that Indian IT companies can use to achieve cost optimisation – this includes improving utilization ratios, better pricing of existing accounts, and vendor consolidation,” said Prasad. For context, Accenture’s utilisation rate stood at 91%, which is significantly higher than companies like <keyword id="6354512" type="General" weightage="20" keywordseo="Infosys" source="Orion">Infosys</keyword>, which reported a 81.7% utilisation rate during the December quarter. In such a scenario, putting the bench to work would be better, Prasad explained. In Accenture’s case, global brokerage Jefferies said layoffs are a result of over-hiring during the pandemic, while Bank of America’s analysts underlined that the rise in jobs was facilitated by cheap capital. “Headcount reduction is a result of over-hiring during the pandemic and a slower growth outlook than originally forecasted,” Jefferies said in a note. Now that growth prospects have tapered and interest rates have risen sharply, companies are realigning their headcounts to match the current macroeconomic realities. <cmsannotation type="cmsannotation" annotationid="Banking woes bring troubles to BFSI spends" comment="subhead" text="Banking woes bring troubles to BFSI spends">Banking woes bring troubles to BFSI spends</cmsannotation> The banking, financial services and insurance (BFSI) segment, which is one of the major revenue sources for Indian IT companies, has seen a cutback in discretionary spendings. The troubles at four banks in 11 days, including Silicon Valley Bank and Credit Suisse, will drive BFSI clients to “focus on current survival rather than investing for future survival,” said a report by Kotak Institutional Equities. “Surviving the current crisis, and ensuring adequate liquidity and capital adequacy will emerge as the top focus, leading to prudence on spending,” the brokerage said, adding that tech budgets outlined at the beginning of the year could be toned down. It added that the deteriorating macroeconomic environment could lead to further polarisation of growth between leaders and laggards of the Indian IT sector. “TCS and Infosys are better positioned among Tier 1 IT. Cognizant and Wipro are vulnerable among Tier 1, higher consulting exposure increases vulnerability for the latter,” the Kotak report added. Overall, cost optimisation has emerged as a theme now with deteriorating macroeconomic environment, Prasad explained. It remains to be seen how Indian IT companies achieve this, hopefully without resorting to retrenchments. SEE ALSO: <a href="https://www.businessinsider.in/careers/news/first-82-days-of-2023-see-more-layoffs-than-the-entire-2022/slidelist/98960848.cms">First 82 days of 2023 see more layoffs than the entire 2022</a> <a href="https://www.businessinsider.in/business/news/debt-schemes-of-mfs-lose-edge-over-bank-deposits-as-budget-proposes-to-scrap-ltcg-indexation-benefits/articleshow/98965932.cms">Debt schemes of MFs lose edge over bank deposits as Budget proposes to scrap LTCG &amp; indexation benefits</a> <a href="https://www.businessinsider.in/business/corporates/news/shinier-zomato-gold-better-commissions-makes-analysts-bullish-in-the-long-term/articleshow/98938279.cms">Shinier Zomato Gold, better commissions makes analysts bullish in the long term</a>

Layoffs coming to the Indian IT sector? Analysts say Accenture’s jobs cuts offers a ‘blueprint’

<ul><li><keyword id="6354512" type="COMPANY" weightage="20" keywordseo="Infosys">Infosys</keyword> temporarily froze hiring, promotions and appraisals in view of the <keyword id="1754604" type="PERSON" weightage="20" keywordseo="coronavirus">Coronavirus</keyword> pandemic. </li><li>It will onboard all the campus and lateral hires to whom they made job offers. </li><li>However, Pravin Rao, COO at Infosys, did not hint of any furloughs or layoffs. </li><li>The company said that all the 6,000 trainees will now continue their training remotely. “There are assessments, certifications and other online training to facilitate remote programmes,” Rao added. </li><li>Rao said that the company is planning to make more than 35,000 offers in FY21.</li></ul>Infosys, in its latest earnings call, said that it has temporarily froze hiring, promotions and appraisals in view of the Coronavirus pandemic, calling it a ‘no regret’ move. For IT giants wages, employee costs and campus placement drives make up for over half of its operational costs. ‘We will honour all offers made — freshers and lateral hires’ Infosys however said that it will onboard all the campus hires. With this, it joins the likes of Accenture, Tata Consultancy Sevices (TCS) and other tech giants who will honour all the job offers made in the last financial year. A large number of companies have rescinded campus job offers forcing even IITs to hold a second placement drive in late July and August. “We are yet to onboard only a small percentage of campus hires we made offers to so far,” said Pravin Rao, COO at Infosys. The technology multinational made 18,000 job offers the last financial year. It said it will also onboard the lateral hires. “We will honour all the commitments made to campus hires — freshers as well as lateral. As far as onboarding timelines are concerned, we have already hired a few lateral employees, while in lockdown,” he said during its Q4 earnings call. Employee count decreases by over 1,000 <div type="image" title="infy employees" msid="75253862" hostid="261"></div> There has been a decrease in the employee headcount — by over 1,000. The employee count at Infosys stood at 243,454 during the third quarter ending in December 2019 — higher than 242,371 as of March 2020. “We should not read into the fall in employee count, it is not a secular trend,” Rao said. He did not hint any furloughs or layoffs, given the Coronavirus chaos. Going forward, Rao said that the company is planning to make more than 35,000 offers in FY21. “In the near term, there will be a demand-supply mismatch because we were already geared for high volume in the first quarter. We have to ensure that the utilisation rates go up,” said Nilanjan Roy, CFO at Infosys. Remote assessment for nearly 6,000 trainees Infosys claims to have a strong digital footprint. The company said that all the 6,000 trainees will now continue their training remotely. “There are assessments, certifications and other online training to facilitate remote programmes,” Rao added. In fact, as much as 93% of the employees at Infosys are now working from home, thanks to the lockdown. The focus is on employee safety. “We will revisit as the situation evolves, keeping the safety of employees a priority. We will also take initiatives like temperature check etc,” the company said. However, as a new normal emerges after the lockdown ends, just like TCS, Infosys also plans to retain work from home. See also: <a href="https://www.businessinsider.in/careers/news/tcs-cognizant-capgemini-and-other-top-giants-who-are-not-letting-go-of-their-new-hires/articleshow/75136446.cms">TCS, Cognizant, Capgemini and other top giants who are not letting go of their new hires </a> <a href="https://www.businessinsider.in/careers/news/capgemini-india-cognizant-and-others-who-are-giving-salary-hikes-in-times-of-coronavirus/articleshow/75151960.cms">Capgemini India, Cognizant and others who are giving salary hikes in times of Coronavirus</a>

Infosys has a new 'no regret' policy when it comes to employees

<keyword id="4606228" type="UNKNOWN" weightage="20" keywordseo="infosys-coo-ub-pravin-rao">Infosys COO UB Pravin Rao</keyword> said reports of large-scale job losses is highly overstated and the company plans to hire 20,000 people this year. Rao said <keyword id="6354512" type="CITY" weightage="20" keywordseo="Infosys">Infosys</keyword> is creating more jobs and the technology-driven transformation presents new opportunities for companies like Infosys. "With respect to all the talks of layoffs, it's regular performance based things that we do every year. The number is really 300-400, which is consistent with what we have seen every year," said Rao. He declined however to comment on views of Infosys co- founder NR Narayana Murthy that jobs can be protected if the senior executives of companies take salary cuts and invest in employee re-skilling. Meanwhile, various employee unions have approached labour commissioners and state governments to intervene in the matter. "I think all the news about job losses are overstated. Infosys itself last year recruited over 20,000 people and this year again, we are likely to repeat similar numbers," Rao said.

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Layoffs coming to the Indian IT sector? Analysts say Accenture’s jobs cuts offers a ‘blueprint’

Rounak Jain

Infosys has a new 'no regret' policy when it comes to employees

Prerna Sindwani

Only 400 people asked to leave, will hire 20,000 this year: Infosys

BI India Bureau

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