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Accenture, which ended November 2024 with 799,000 employees, added 24,000 employees in the June-August 2024 period and 25,000 employees in the three months through November 2024. Its new recruits in the last six months alone make up about 6% of its overall workforce.
Accenture follows a September-August accounting year.
Recovery on cards?
India’s $254-billion software services industry, with big names like Tata Consultancy Services (TCS) Ltd, Infosys Ltd, HCL Technologies Ltd, Wipro Ltd, and Tech Mahindra Ltd, reported their slowest revenue growth of 3.3% last year due to macroeconomic uncertainties.
TCS, Infosys, and HCLTech grew 4.1%, 1.9%, and 5.4% on a yearly basis to respectively report $29.1 billion, $18.6 billion, and $13.3 billion in revenue for the year ended March 2024. Wipro and Tech Mahindra reported a yearly decline in revenue of 3.8% and 5% to $10.8 billion and $6.3 billion respectively.
Some analysts said a recovery is on the cards.
“While a strong recovery of discretionary demand may take a few quarters, it is unlikely to worsen further, in our view,” said Nomura analysts Abhishek Bhandari and Krish Beriwal in a note dated 19 September. “Onset of the interest rate cut cycle from September 2024 and a potential thaw in decision-making by US corporates post-US elections in November 2024 could provide a fillip to demand, in our view.”
Renewed hiring, which is an indicator of growth, suggests that homegrown IT services companies could also record better growth in the coming fiscal.
“With the full employment situation in the US and expected economic stimulation from tax cuts in 2025, I anticipate a good year ahead for Indian IT with US corporate customers,” said Phil Fersht, CEO and chief analyst, HFS Research.
As the IT industry rebounds, headcount increase across software companies will be needed to meet the growing demand.
“Growth has bottomed out and recovery is on the cards. While increasing headcount will be required to meet the additional demand for tech services now, the only uncertainty is the pace of recovery,” said Pramod Gubbi, founder of Marcellus Investment Managers.
“Strong headcount addition by Accenture does indicate improved demand. But demand may still not be as broad-based, as Accenture’s hiring could be aligned with strong order bookings in recent past, where it might have won against Indian peers. That said, headcount addition should continue for India IT services players as well, as they rebuild bench and correct pyramid,” said Abhishek Kumar, equity research analyst with JM Financial Ltd.
Expanding workforce amid rising demand
Indian IT services companies have already started adding headcount in anticipation of rising demand for their services.
Four of the country’s top five IT services companies, including TCS, Infosys, Wipro, and Tech Mahindra, have added people since this fiscal year began in April.
TCS added 11,178 employees in the first two quarters of FY25, compared to a fall in headcount of 5,900 in the same period last year. In total, TCS ended the September quarter with 612,724 employees. The company had outlined its plans to onboard 40,000 employees in the current fiscal ending March 2025.
Bengaluru-based Infosys added 598 net new jobs in the first half of the fiscal, compared to a fall in headcount by 14,470 in the first half of last fiscal. It ended the September quarter with 317,788 employees. The company is looking to hire 15,000 – 20,000 freshers for the year ended March 2025.
Wipro added 1,315 employees since April this year. It had reduced its workforce by 13,863 employees in the first half of the last fiscal. It ended September 2024 with 233,889 employees. The Bengaluru-based IT services company aims to add up to 12,000 freshers by the end of this fiscal.
Pune-headquartered Tech Mahindra Ltd increased its workforce by 8,818 since the start of the fiscal. This is against a net headcount reduction of 1,796 in the first half of the previous fiscal. Tech Mahindra ended the three months through September 2024 with 154,273 employees.
By contrast, Noida-based HCLTech, the country’s third-largest IT company, reduced headcount in the first half of this fiscal as well as the previous one. This fiscal, it cut 8,860 jobs after it got out of a joint venture with State Street, a Boston-based financial services provider. It had slashed 4,805 jobs in H1FY24. It ended the September quarter with 218,621 employees. Despite the reduced headcount, the company aims to add 10,000 freshers by the end of the current financial year.
Accenture taps India’s skilled talent pool
For now, Accenture’s management attributed the hiring, now for the third consecutive quarter, to its business picking up.
“So we did add about 24,000 people in the first quarter, which is really reflective of the momentum that we see in our business,” said Angie Park, chief financial officer of Accenture, in the company’s post-earnings conference call with analysts on 19 December.
Accenture reported $17.7 billion in revenue for the three months ended November 2024, up 7.8% sequentially.
The NYSE-listed company got much of this new talent from India, where most of its employees are based, but did not mention what percentage of the new talent came from acquiring new companies.
“Looking ahead, we’ll continue to hire for the demand that we see and the skills that we need. And I’ll give you a little bit more context that the hiring that we saw this quarter, similar to last, was that it was concentrated in India,” said Park.
The company attributed the hiring from India to the availability of skilled talent.
“And so they really are looking for optimization of the right skills because a big piece of why people, for example, use India, is about skills, right? 10 years ago, it was about labor arbitrage, right? Today, it is about the ability to get these skills at scale,” said Julie Sweet, chief executive of Accenture, at the company’s post-earnings press conference, while answering a question on clients wanting employees working from their own locations.
While Sweet considers India’s talent pool as skilled, placement officers at the country’s engineering colleges that supply workforce to these companies are highlighting a growing demand for this skilled talent.
“Companies today prefer to hire students skilled in AI, machine learning, and data analytics to name a few because these technologies are used across domains in different fields,” said Sridhar K.S., dean of placement and training at PES University in Bengaluru.
A second placement officer said the demand for skilled graduates has risen.
“The companies have been asking us for skilled talent more now than they had in the past, as there are plenty of new technologies now,” said Ranganath D, dean of placements at R.V. College of Engineering in Bengaluru. “Today, companies want students who have been skilled in AI, data analytics and machine learning and we encourage our students to take up such courses.”
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