11000 employees resigned from top Indian companies in the last 90 days

Due to the impact of COVID, 11000 employees resigned from top Indian companies in the last 90 days. This is the first in recent times when the employee count of these top companies reduce drastically

11,000 employees resigned from top Indian companies in the last 90 days

Although, these companies are hopeful of hiring in the upcoming days

In the April-June quarter, India’s largest software company TCS lost 4786 employees. In the same quarter, 3138 employees resign from Infosys. While the numbers at Wipro and Tech Mahindra are at 1082 and 1820 respectively.

A cumulative of around 11,000 employees resign from all these companies. Mr.Pravin Rao, the COO of Infosys says that currently the company has stopped hiring but it already has recruited around 5000 laterals around the world.

All these new recruits are onboarded remotely. Infosys also says there are plans to bring around 20,000 freshers this year.

Meanwhile, at Wipro, CFO says that the company has enough talent for its projects. He also says that the company always looks for revenue and if there is a need to hire new talent, the company is going to hire

Also, read: Swiggy announces that more job cuts are happening

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Wipro’s benched staff receive pay cuts

Wipro’s benched staff receive pay cuts. In an extended bench period, the employees who are put on the bench will be on the loss of pay. This extended period will last for 3 months

Wipro's benched staff receive pay cuts

The company says that these employees will only receive insurance coverage and nothing else. Usually, in IT companies, the bench means that the employee is not part of any billable projects.

The count usually varies from 5-7% employees on the bench at any time. In bigger companies, the count can be more. In Wipro, the new change is directed towards employees who are already on the bench and received a bad assessment of their work.

The company sends out an email to the employees stating that while on the bench the employee may choose to use their available leave balance. Once the leave quota is over, the employee will be on unpaid leave for the rest of the period on the bench.

These are one of the first actions taken by the new CEO. If any employee fails to join any billable project in the given period, the company has the right to terminate the employee, according to the new rules.

Also, read: Karnataka government approves the 70% local jobs policy

Wipro says that one of the areas to focus in India right now is to protect jobs. The company believes that this new policy is a way to achieve that goal.

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Which IT firm has the highest number of H1B employees?

Recently, US President Donal Trump announced a ban on H1B visas and green cards, until the end of this year. This led to companies looking to hire local talent. Let’s see which IT firm has the highest number of H1B employees

Which IT firm has the highest number of H1B employees?

Currently, there are 76,649 Indian employees working in IT firms. This includes TCS, Infosys, Wipro, Cognizant, HCL, etc.

The visa ban will not affect the current visa holders but it might lead to an increase in the rejection of the renewal rate. In 2016, the rejection rate is around 4%. It increased to 21% in 2021

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TCS is the largest holder of total employees compared to other Indian IT companies. The overall count is 54,874. Of the 40% are on visas and rest are local talent. In the visas segment, 90% are under H1B visas and rest are under L1 visas

Infosys has an overall strength of 36,228 employees working for them in the USA. Out of these, 21,737 are local staff. Just like TCS, Infosys also has 40% of the employees under visa

Cognizant also depends highly on the H1B visas. 50% of its workforce works under H1B visas. Of them, 90% are of H1B visa candidates and the rest are of L1 visas

Meanwhile, Wipro and HCL are less dependent on the visas. Only 35% of its staff work with visas. Of them, 90% are working under H1B visas and rest are L1 visa candidates.

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Wipro plans to adopt new work from home model

After TCS and IBM, now Wipro plans to adopt new work from home model. The Wipro chairman announces that the company will come out strong from the COVID impact. Next month, Wipro is set to welcome its new CEO.

Wipro plans to adopt new work from home model

The chairman tells that almost 90% of the current employees are work from home right now. He also tells that the company cannot go back to the old model of working. Hence, it has to adopt a new model which includes the employees working from home

More articles: Cognizant forces its benched employees to resign

In his first letter to the new CEO, Azim Premji says that the company will come out stronger once this corona lockdown ends. The next few months will be crucial for the company to resurrect the business.

Why Wipro plans to adopt new work model?

Mr.Azim Premji also believes that as more and more companies focus on the resurrection, the more adoption of technological advancements. He also says that the company cannot now function with 100% of the employees working from the offices. The current employees are now trained efficiently to work from home

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On the appointment of the new CEO, Mr.Premji says that the new CEO Thierry will bring exceptionally great leadership, strong international exposure, deep strategic expertise to the company. He also has the experience to drive the transformation and managing technological disruption. He believes Thierry is the right leader currently for the company

How about other companies?

Recently, TCS announces a new work from a home model, in which only 25% of the total employees will work from the offices by 2025. Also, each and every employee will spend only 25% of their time in the office

Earlier, Infosys also announces a new work model. According to this model, around 80,000 employees will never come to the office. The company also wants 66% of the employees to work from offices and 33% to work from home permanently.

Along with TCS and Infosys, IBM also announced plans in which only 25% of the employees will come to offices and the rest will have flexible work from home plans. Also, IBM plans to reduce the workspace to 50% in India.

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Over the past few years, these Indian IT firms have benefitted by hiring fewer people

The top IT services providers in the country have hired fewer people over the past few years in comparison to their revenue growth across the same timeline. This indicates that companies are adopting various automation and digital technologies.

Companies like TCS, Infosys, Tech Mahindra, HCL Technologies, Wipro have increased their growth over the past few years. This has been achieved by adopting the artificial intelligence technologies, automation of tools and digital services

During the same period, the businesses of core services like application development, maintenance, and infrastructure have fallen. Analysts are saying that this can be due to using automation and other technologies for the tasks which are at the bottom of the pyramid.

India’s largest software service provider, TCS currently employs 4,48,464 employees and has seen a compounded growth of 7% in hiring. In relation, the company’s revenue has grown by 10.64% every year. Meanwhile, Infosys’s revenue growth is slightly higher than TCS at 11.23% since the financial year 2015. The company has seen an increase in hiring by 6.59% for the past 5 years

The highest disparity between revenue and hiring among the top IT service providers in the country is observed at TechMahindra with revenue growth at 10.26% and hiring is at 4% each year since FY15

Since the FY15, Wipro has seen a 3% increase in hiring every year, and the revenue of the company has grown by 5.38% for the same period. HCL is the one that has performed well in terms of revenue for the last 5 financial years. The company’s revenue has been increased by 13.77% while the hiring has seen an increase of 7.23%. In the last five years, the company has recruited around 47,000 employees which increase the overall employee count to 150,423

However, at Tech Mahindra there has been a great difference between revenue and hiring for the last 5 years. The revenue of Tech Mahindra grew at 10.26% while new employees are recruited at a rate of 4% each year. Analysts predict that this great disparity at Tech Mahindra is due to the increased number of subcontractor staff deployed in every project.

Last week during the filing to the US Securities and Exchange Commission, Infosys announced that the use of automation tools and related technologies have cut down the costs for the company. Also, this has led to the involvement of manual effort in the projects.

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Now its Tech Mahindra. Pune Labor Commission has sent a notice to Tech Mahindra for imposing salary cuts


Pune’s Tech Mahindra has received a notice from the Pune Labor Commissioner’s office after an IT employee welfare organization has filed a complaint against Tech Mahindra over the reduction of salaries to its employees. The complaint has been filed by NITES(National Information Technology Employees Senate). NITES has received lots of complaints from the employees of Tech Mahindra.

Last week, the employees of Tech Mahindra has received a mail stating that the shift allowance payments ranging from Rs. 5000 to 10000 will be discontinued from May 1. Reports say that over 13000 employees are affected due to this. Earlier, Wipro has been subjected to such notice.

The letter says that NITES demands strong and strict action against the Tech Mahindra Pune branch, due to the company failing to follow the human rights and also violating the Maharashtra Government’s state orders. Along with the letter, a notice has also been sent by Nikhil Walke, Assistant Labor Commissioner. The Maharashtra Govt. orders are that during the lockdown, no employer should cut the salaries of their employees.

In response, a Tech Mahindra spokesperson has said that the employees who are coming to the office to work at odd hours are being paid the shift allowances and also to the people who are at client locations. Also, it is said that their primary focus is to ensure the well being of the employees and associates of Tech Mahindra while continuing the business.

The company has informed during the Q4 results that some of its clients are cutting down discretionary spending. The company also was affected in the BPO business, due to the delayed approval of work from home. Several analysts also confirmed that all the BPO businesses in the country are affected due to the same delay in getting the approval of the work from home of its employees.


Related Articles: Wipro received a notice for benching its employees

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Wipro received notice from Pune Labour Commission for benching employees


After reports emerged of Wipro benching nearly 300 of its employees, the Pune Labour Commission has sent a notice to Wipro. The notice states that necessary action should be taken by the Wipro regarding the situation, if not legal action will be taken against it.

The notice also says that the employer cannot reduce the salary of the employees or cannot terminate them during the lockdown. This has come after the National Information Technology Employee Senate has filed a petition with the commission on May 1

NITES has written a letter which says that they have received complaints about Wipro BPO Pune in regard to the benching of employees to maintain profits during the lockdown. The letter further states that this is a violation of the Maharashtra Government’s rule, which says that employees should not be impacted during the lockdown.

Almost all the IT/ITes companies have stated during their Q4 results that this quarter would be worse and canceled the guidance due to the lack of growth visibility. In these upcoming quarters, firms can expect pressure pricing, project deferrals, and demand drops. The companies have put hiring freezes to maintain the costs. The firms have also suspended promotions and hikes

Many of the analysts feel that with the current situation, the benching of employees is inevitable. New projects might also get deferred due to current situations. Employees also feel they might be laid off due to the fact that getting new projects by the firms would be very difficult and they have to pay the price for it.

However, Wipro has stated in an email that says that these are just allegations and denied them. Wipro also requested not to misinterpret the intracompany surveys that are undertaken at various times. The company also stressed that there are policies to protect its employees.

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Companies looking to add more work from home clauses with their clients’ post-COVID


Many of the tech giants in the country and software service exporters like TCS, Wipro, HCL, Cognizant, have moved most of the Indian engineers to abroad/onsite to debug technology issues or to co-innovate

But with these situations like lockdown, these companies have learned a lot and are modifying the entire IT work culture. These companies are looking to add more work from home clauses in their contracts agreement with their clients while taking up the projects.

Peter Bendor Samuel, the chief executive of IT consultancy group Everest, has said that in further projects it is highly likely that more work from home clauses are to be added to the Master Service Agreement. The process of working from home and different models of working from home has been a revelation to both clients and the companies and is looking to include this further in future projects as well. He also further said that the Covid-19 outbreak has decreased the demand for talent as well as freed up additional talent in US, Europe. After this lockdown, it can be expected that more work will be shifted towards onshore and away from IT service companies

The companies also believe that more people working from home would also free talent onsite especially in countries like the USA, Europe.

TCS already had come up with a plan in which 75% of its employees will work from home in the near future. However other companies still feel it is early to conclude anything on this model as they feel there are several models to explore.

Chief Human Resources Officer at Wipro, Mr. Saurabh Gill has said that there are various discussions and analysis happening in adopting these kinds of models, whether to have a set of employees work from home permanently, etc. However, he said that the main idea for an employee to be sent onsite is to be closer to the customer.

Ray Wang, chief analyst at Constellation Research has said that several vendors are using this work from home option as an upsell and some others are using it to wind deals. Analysts also feel that even if adopting these models will not give encouraging results immediately, in the longer-term they will yield better results with the costs cutting in various departments Logistics, travel, office space, etc.


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Indian IT firms are planning to reduce the dependency of subcontractors to control costs


As the COVID-19 is causing problems with revenue and margins fo the firms, Indian IT firms like Infosys, Wipro, TCS, MindTree are looking to reduce their dependency on the subcontractors to control the costs. According to a statement, these companies said that the subcontractors’ cost might reduce in the upcoming months. As of now, around 10-15% of total employee costs will be the value of a subcontractor.

Over the last few years, the subcontractors’ cost has increased due to the fact that companies are preferring to look elsewhere to hire people instead of looking at the inhouse talent they have.

Mr. Milink Lakkad, the Global Head at TCS has said they are looking to reduce these subcontractors’ costs in order to keep the costs under control. He also added that they will continue to build the talent from within the organization and lateral hiring will be done in a limited manner.

Last year, 13% of employee cost is the value of subcontractors at TCS. At Wipro, it is 22%, while at Infosys it is 12%. The subcontractor’s value at MindTree is at 11% of total employee cost.

The Chief Human Resources head at Wipro has said that they are evaluating all the supply chain of employees which also includes hiring, subcontractors, bench. He also said that there are multiple contractors working with them and it is going to cost them. Hence they are looking to replace them with their own pool of employees.

Infosys CFO also addressed the same in cutting subcontractors’ cost to optimize the overall costs. MindTree is also looking to follow the same. These companies are cutting the subcontractor’s cost in multiple ways. One way is to reduce the number of contractors associated with them, other way is to ask the contractors to take rate cuts and the final way is to ask the contractors to take deferred payments.

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Lowest in the decade. IT companies might record their lowest revenue in this decade


Various factors like cutting down on discretionary spending and slowing down on demand could cost the revenue of IT companies to a greater extent. With the current situation being bad many IT companies like Infosys, Wipro have said that they will not be providing revenue growth guidance for the financial year 2021 and the June quarter. Along with these companies, Cognizant also refrained itself from revenue growth guidance for the full year.

The revenue pressure will be high on the IT company for the year 2020-21, according to a rating agency Crisil. This could be due to Covid-19. The growth could be very low, around 0-2% which is way less than in the 2018 fiscal year. This analysis is done on the largest 15 firms which contribute to the 70% revenue of the sector.

Analysts predict that this COVID slowdown will have a huge impact on various sectors and across different industries. Emkay Research has said that even though there is no blow-up yet for any organization, the disruptions across various verticals could result in a huge loss for the Indian IT companies.

TCS CEO and Wipro CEO recently had said that due to this COVID, there could be price re-negotiations between the companies and the clients. Typically, the deals between companies and the client most probably happen between March and May. But this time, during that period the clients are focused on cutting the emerging business risks and defer the discretionary IT spend. Analysts also said that for certain areas in IT such as cloud, virtualization, etc the demand had increased post lockdown. Several experts and top VPs of various companies believe that any product which helps the client to move their work more towards remote will be of huge demand.

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