India Inc staff costs rises at slowest pace in 10-quarters as IT hiring weaken

The employee costs at corporate India grew at a slowest pace in 10-quarters as software firms slowed down their net hiring due to weak demand environment. September quarter was the sixth consecutive quarter where IT firms clocked some decline in hiring.

While the total workforce base at Infosys declined by 7,530 in September quarter, the largest IT firm –Tata Consultancy Service (TCS) – saw its headcount falling by 6,333. For HCL Technologies, the fall in headcount was 2,399. The three top technology service providers spend more than half of their revenues to meet employee expenses. Further, most IT companies reported muted sequential growth in Q2 revenues with bleak outlook.

According to a Jefferies note, the employee cost of companies under its coverage grew 12.8% in September quarter –the lowest in ten quarters. "IT companies reported tepid 0.3% quarter on quarter (QoQ) revenue growth but weak outlook with guidance cuts and net employee count declines seen across IT majors," said the foreign brokerage in a note dated November 16.