TCS, Infosys, Wipro, HCL and Cognizant– together added net 24 percent fewer employees in 2015 at 77,265, thanks to their automation drive. This came at a time when these companies’ combined dollar revenue grew 9.8 percent.
The massive reduction in net additions was led by Cognizant Technologies (down 74.6 per cent from 2014) and HCL Technologies (down 71 per cent) which have been very keenly focusing on improving utilisation rates through automation, says a report by city-based brokerage Centrum Broking.
The report states, “Software vendors across the pack are focusing on automation and we believe that FY16 will be an inflection point”.
“We see rapid scope for vendors improving efficiencies through expanding automation across multiple projects and service lines owing to sheer competitive pressure.
The report notes,
“The result is that these five companies have net added 24 per cent fewer employees in 2015,”
The report also notes that the drop would have been much higher had it not been for Infosys, which made a whopping 111.4 per cent net addition at 23,745 in the year. But this is understandable due to the massive attrition the company was facing in the past many years.
Even though each of these companies have their own automation platforms – Infosys has Infosys Automation Platform, Wipro has Holmes, HCL Tech operates Dry Ice, and TCS has Ignio – their focus on this line of business has seen emergence of many independent players offering automation services or virtual engineers.
Companies offering such services include IPSoft, Blue Prism, Genfour and Automation Anywhere.
The report also notes that FY16 could be a year of transition in the sector on the automation front and tangible benefits can flow down from FY17 as vendors are focusing on re-training the freed up resources from the traditional service lines.
“With automation enabling improved delivery efficiency and productivity, the IT sector could be facing a scenario of lower net additions in FY17/FY18,” it said.