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Winds of change in Indian IT services industry

Having remained the largest private sector employer for decades, the Indian information technology (IT) services sector is perhaps set for a change as three of its largest companies — Tata Consultancy Services (TCS), Infosys and Wipro, have remained slow on hiring in the past few years, hinted at bottom fishing of workforce and ‘restructured’ their senior-level staff.

According to experts, the shift in technology landscape and the resultant change in demand from clients is the major reason for this swing.

As per industry body Nasscom, the IT and business process management (BPM) sector employs 3.1 million people, including around one million urban women. At the end of July-September 2014, TCS had a total headcount of 3,13,757, while Infosys and Wipro employed a total of 1,65,411 and 1,54,297 employees, respectively.

“There is a shift in what work clients want and vendors need to think about how they can address that,” Sudin Apte, research director & chief executive officer at Offshore Insights said. “From client perspective they have three major challenges; quality of people working on a project, attrition within the engagement and domain expertise. Among these, domain expertise is one of the biggest challenges.”

While sector heavyweights Infosys and Wipro had remained slow on hiring through FY13 and FY14 amid a slump in business momentum, India’s largest IT services player TCS continued hiring in bulk from engineering campuses during all these years.

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