How HCL Tech bucked the shrinking headcount trend
Also read | Thank the productivity paradox: AI isn’t the job killer it’s feared to be To some extent, this explains how HCL Tech bucked the trend. Its revenue growth outpaced that of Infosys and Wipro in all four quarters of the previous fiscal year, while it beat that of TCS in two quarter, and nearly equalled it in one. TCS’s human resources head said the company has been “focusing more on utilising the capacity that we have built over the prior years".
Still, the HCL Tech stock has dropped by 11% so far this year, compared with a 4% drop for Wipro, and gains by TCS and Infosys. This is partly because HCL Tech's guidance for FY 2024-25 was muted. At a projection of 3-5% growth, it was a “tad lower than Street/our expectations of ~4–7%", said ICICI Securities.
HCL Tech during its earnings call also suggested that clients' discretionary spending was yet to pick up. While HCL Tech has outpaced its larger rivals in revenues in the past two quarters, it is not the key reason why it bucked the trend of shrinking headcounts. The key reason is the hiring behaviour of tech majors during the previous two fiscal years, especially in 2021-22.
During the pandemic, due to mobility and other restrictions, companies globally started rolling out digital transformation projects taking the help of Indian IT services companies. Also read | HCL Technologies projects weaker year ahead than FY24 To service those projects, domestic IT companies hired in large numbers, expanding their employee base significantly. In 2021-22, the employee count of TCS grew by about 100,000, and that of Infosys by about 50,000 and Wipro by 45,000.
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