‘What does non-billable mean?’ ‘I am non-billable, so very scared.’ ‘My training is complete and looking forward to the project. Should I be worried too?’ ‘I am currently working on a project but the client is not covering my expenses, so am I at risk of being non-billable?’ ‘Is the news confirmed? 19,000 is a big figure. It will have a big impact.
IT professionals have been voicing similar concerns and apprehensions on social media. Soon after Accenture’s announcement that it was laying off 19,000 employees worldwide, networking social media platforms were flooded with similar questions and concerns.
While stating the results of the second quarter of FY 2023, the company announced on Thursday that it would lay off 2.5 percent of its total 7.38 lakh employees i.e. 19,000 to fix the expenses.
India is the company’s largest overseas center and has over 3 lakh employees. At present, it is not clear what effect the retrenchment will have in India, but industry sources say that 2 to 2.5 thousand workers can be shown the way out here.
In response to an email, a company spokesperson said, “2.5 per cent of our total global workforce may be affected. Figures may vary from market to market and country to country depending on our reach and growth. It should not be assumed that only this percentage of employees will be fired in every country.
Meta (Facebook), Amazon, Alphabet, Microsoft and other tech firms have also announced layoffs. But Accenture’s announcement has Indian engineers more worried than them.
Accenture isn’t the only company to announce layoffs. Last month, IBM also said it would lay off 3,900 people worldwide. But analysts have said in the past that the impact of Accenture’s announcement is immediately visible on Indian IT services companies as their working model is similar. They work on the same model.
Kamal Karanth, co-founder of Xpheno, said the recent layoffs and now the announcement by Accenture are the result of massive hiring and expansion a year ago. He said, ‘In the era of boom, many companies increased their business in high-cost places. Therefore, with a slowdown in business (as in the BFSI category), a change in workforce and fresh hiring has become necessary. BFSI has been the top client of the IT industry and hence the impact is also visible on the pool of technology talent.
Karanth also said that the employee attrition rate in IT is still 12 to 13 per cent. This suggests that the movement of talent in and out of the region will continue.
Most importantly, according to Accenture, the pace of hiring in the third quarter is likely to be slow. It said that the employee utilization for the quarter ending February 28, 2023 was 91 per cent, which is probably higher than other major IT companies.
However, IT professionals are worried that other major IT companies may also follow the path of layoffs like Accenture. Whatever happens in the IT sector reverberates far and wide. For example, in the third quarter of FY2023, more employees left the company than the number of employees recruited in TCS. Hiring in Infosys and Wipro was also lower than expected. Many companies did not even go to the college campus to recruit freshers.
HR experts say the layoffs have already affected salary hikes and hiring. AR Ramesh, director (managed services and professional placement), Adecco India, said, “Earlier, those who got salary hike of more than 100 per cent will be the target. We may also see some retrenchment affecting this category.
Ramesh believes that the industry is already on its way to normalcy with salary hikes in the range of 8 to 9 per cent this year. But he cautioned companies that layoffs could have wider ramifications ahead.
