The global consulting and technology services firm Capgemini shared that the company’s leadership in AI services is well recognised by industry analysts. And generative AI continues to drive client discussions, leading to larger-scale deployment projects.

Capgemini is currently engaged in over 350 new projects, with more than 2,000 deals in the pipeline. The company has also scaled its capabilities by training over 120,000 employees on generative AI tools and continues to invest in related tools, assets, and platforms.

Capgemini generated revenues of €11,138 million in H1 2024, reflecting a year-on-year decrease of 2.5% on a reported basis and 2.6% at constant exchange rates. Despite this decline, the demand environment shows signs of gradual improvement. 

Following a challenging first quarter, revenue growth rates improved in the second quarter across all business segments and nearly all regions and sectors. Group revenues in Q2 contracted by 1.9% at constant exchange rates and 2.3% on an organic basis.

In the first half of the year, clients focused on enhancing efficiency through cost transformation programs, with continued demand for non-strategic discretionary deals. However, Capgemini’s cutting-edge services in the Cloud, Data & AI, and the Intelligent Industry maintained solid traction.

Accenture is Here too

Accenture announced over $900 million in new bookings for generative AI, reaching a total of $2 billion fiscal year-to-date during its Q3 FY24 earnings report.

“We have achieved two significant milestones this quarter — with $2 billion in generative AI sales year-to-date and $500 million in revenue year-to-date — demonstrating our early lead in this critical technology,” the company said in a statement.

“We also continue to steadily increase our data and AI workforce, reaching approximately 55,000 skilled data and AI practitioners, against our goal of doubling our data and AI workforce from 40,000 to 80,000 by the end of FY2026,” said Accenture CEO Julie Sweet during the earnings call.

Meanwhile, Indian IT majors like TCS have doubled up on its AI game. The IT giant announced that it is doubling its AI pipeline to $1.5 billion this quarter, from the $900 million pipeline reported in the previous one.

TCS is now also working on around 270 AI projects worldwide. Moreover, in Q1 FY25, it applied for 154 patents and was granted 277, as revealed by TCS chief K Krithivasan. Regardless, Krithivasan said that TCS is still only experimenting with generative AI, admitting that deriving business value would take

Even Infosys has emphasised its dedication to generative AI in its latest Q1 FY25 results, but not revealed the numbers.

“We continue to see strong traction from our clients for generative AI programs delivered through Topaz. Enterprises are focusing on leveraging their own datasets for use in generative AI and large language models, which are creating a significant impact for them,” said Salil Parekh, CEO and MD of Infosys.

In Q1 FY25 earnings, Indian IT company, Wipro mentioned that it has achieved a significant win in the automotive manufacturing segment, where a US-based OEM selected the company to streamline global infrastructure services using automation and AI for improved user experience and reduced costs. 

Wipro’s AI Game

Wipro is focusing on AI-powered solutions through a consulting-led approach to transform clients’ business models. Recent wins include a project with a US-based health solutions company to integrate CMS guidelines into billing, and a collaboration with a North American financial services company to develop a GenAI-powered assistant for wealth management. 

Wipro is also dedicated to building talent, having provided foundational AI training to over 225,000 employees and advanced training to an additional 30,000. Utilising its in-house AI expertise, it is developing GenAI solutions across all units and functions, aiming to boost employee capabilities and make the company GenAI-ready. 

Further, the company is driving innovation and enhancing productivity through investments in the Lab 45 AI platform and Wipro Enterprise GenAI Studio, incorporating various GenAI tools into the software development lifecycle.

Well, HCL continues to see numerous opportunities in AI and generative AI (GenAI) business trends. They launched HCLTech AI Force, a generative AI and automation platform, and the HCLTech Enterprise AI Boundary suite to simplify and scale enterprise AI journeys. 

Notable AI-led engagements include implementing a GenAI-based solution for a global technology major and automating gaming review analysis, which resulted in significant workload reduction and a 119% increase in game reviews. 

Additionally, they are transforming the client’s content lifecycle management with GenAI features. 

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A couple of years ago, Delta Airlines introduced the concept of ‘Parallel Reality’ at the Detroit Metropolitan Airport. With this, they enhanced a customer’s airport experience by using a public screen to display personalised information relevant to each passenger.

Now, interestingly, one of the largest IT companies in India is building a customised passenger experience on similar lines.

“We are in the process of developing a comprehensive web-based mobile digital concierge that represents a significant leap forward in meeting modern travellers’ expectations,” said Wipro Limited Canada transportation cluster head and general manager Anudeep Kambhampati in an exclusive interaction with AIM. 

The new platform integrates journey planning, baggage tracking, and personalised recommendations that will be tailored to each passenger’s travel path. 

“The integration of generative AI chatbots further enriches this personalised experience, offering real-time, interactive assistance,” said Kambhampati. Wipro has conducted a few PoCs around this in different stages and is in the process of refining the experience before it is launched to its clients. 

Wipro vs the World 

While Wipro is increasingly working its way into the airline industry, with strategic partnerships with Toronto Pearson and industry bodies such as the International Air Transport Association (IATA) and Airport Council International, other Indian IT players are also in the race. 

IT giant Infosys also offers similar AI/ML solutions through its cloud platform Infosys Cobalt Airline Cloud where services such as optimised baggage tracking, handling, security monitoring and many more are offered. 

TCS has Aviana which provides smart airport solutions and engineering operations through its unified data platform. Non-IT players such as Prisma AI are also providing services through computer vision technologies at Adani airports. 

Interestingly, the current technology partner for Digi Yatra is IDEMIA, a French company which provides their services at the Delhi, Hyderabad and Goa airports. In addition, the Digi Yatra Foundation recently severed ties with Dataevolve, a Hyderabad-based company who served as their initial IT solutions provider, seeking to partner with Infosys and TCS.

Wipro told AIM that it has been offering technological and operational services to enhance airport facilities. “Our computer vision AI technology has revolutionised passenger flow analytics, providing real-time wait times with over 90% accuracy,” said Kambhampati.

The company’s in-house product, VisionEDGE, powers more than 5,000 flight information displays across 15+ airports in the US, Canada, India, and the Middle East.  

Wipro’s services reach over 300 million passengers per year, covering over 200 airlines across 300+ destinations, with over 15+ terminals and 25+ runways covered as well. 

“On the customer-facing side, we are collaborating with airports in North America and the Middle East to deploy generative AI-powered virtual assistants,” said Kambhampati.

In 2022, Wipro also developed a first-of-its-kind passenger queue system that provided passengers with real-time boarding updates. 

A Unique Generative AI Strategy  

Wipro uses Azure OpenAI, AWS AI, OpsRamp, ServiceNow AI, Zensors, the Wipro AI 360 platform – the company’s holistic and AI-centric innovation ecosystem, and several other tech infrastructure products. 

Kambhampati highlights that generative AI’s inherent intelligence can be trained but not fully controlled. Thanks to this, Wipro recommends a “phased implementation strategy” to address inaccuracies and legal concerns by exposing AI applications to a select section of the public for feedback and benchmarking.

Wipro has been making long strides in the generative AI race. With a rising demand from Wipro’s customers for AI solutions, the company is providing enterprise services by developing AI models using a generative AI framework. The company has even trained 225,000 employees in AI 101. 

Wipro CEO Srini Pallia had earlier said, “We focus on industry-specific offerings and business solutions led by consulting and infused with AI, and we’ll continue to build this.”

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Indian IT company, Wipro is feeling confident about its generative AI solutions. “We are on the brink of a major technological shift. Every client I talk to across industries is very eager to leverage AI to shape the future of their business, and at Wipro, we have been gearing up for this moment,” said Wipro’s new chief Srinivas Pallia during the Q4 2024 earnings call. 

In the latest quarter, the company launched Wipro Enterprise Artificial Intelligence Ready platform in partnership with IBM, expanding on a substantial investment in AI. According to Pallia, this new service will enable clients to create an enterprise-level, fully integrated, and customised AI environment.

“A leading global apparel brand chose Wipro as its strategic partner to implement Gen AI solutions for driving their digital transformation,” said Pallia, adding that this involves implementing large language models to improve search recommendation engines and enable hyper-personalisation at scale, all done responsibly.

“We have trained more than 225,000 employees in AI 101,” said Saurabh Govil, Wipro’s CHRO. He added that the company is looking at advanced courses in different domain areas, depending on the kind of PoCs and projects, and deploying people accordingly.

“This continues to be a big priority for the company,  making people ready for the future, so that will continue as a big focus area in the coming year,” he said. 

Moreover, Wipro is investing to strengthen its capabilities across organizations and making bold moves in M&A, acquiring companies like Capco and Rizing, which have boosted consulting capabilities and simplified the company’s operating model, said Pallia.

“We focus on industry-specific offerings and business solutions led by consulting and infused with AI, and we’ll continue to build this,” he said, adding that it’s important to build AI talent and skills which are able to deliver industry-specific business solutions.

“AI will help us bring productivity from the technology part, but it also gives us an opportunity to impact the business and operations for our clients, and that’s another area we want to train our employees in. That’s why I said our skills have to be AI-ready but very specific to the business or industries that we want to address,” added Pallia.

Recently, Infosys revealed in its Q4FY24 quarterly reports that the IT giant is seeing excellent traction with its clients for generative AI work. However, this quarter, as well, it did not disclose the revenue from generative AI, much like Wipro.

Meanwhile, during its recent earnings, TCS revealed that it has an AI and generative AI pipeline worth $900 million, as CEO and MD K Krithivasan revealed during the Q4 2024 earnings call. This figure nearly matches the revenue achieved by rival Accenture, which totalled $1.1 billion in the first two quarters.

Last year, Wipro announced that it will invest $1 billion over the next three years. Wipro has partnered with the Indian Institute of Technology (IIT) Delhi to launch a Center of Excellence on Generative AI. This center aims to support foundational and applied research in generative AI and develop R&D projects that gauge the commercial potential of these technologies. 

 Wipro’s generative AI initiatives are part of a broader strategy to integrate AI into every tool and solution it offers, aiming to create a comprehensive AI-first innovation ecosystem known as Wipro ai360. 

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Indian IT giant Wipro reported a 12% decrease in its consolidated net profit, which amounted to ₹2,694 crore in the third quarter of fiscal 2024. This marks the fourth consecutive quarter of decline for the company. During the same period, its consolidated revenue also dropped by 4.4%, totaling ₹22,205 crores. Additionally, Wipro secured 14 large deals with a total contract value (TCV) of $3.2 billion, 71% of which were new net additions.

Among these, one of the most significant deals signed in Europe this quarter involves transforming the digital workplace services of a multinational telecommunications company, aimed at enhancing client satisfaction and reducing operating expenses.

The team will build an AI-powered platform for them that provides service desk on-site and remote support services for 400,000 users and 80,000 managed services across 240 locations worldwide. 

Turns out that Wipro’s clients are now increasingly requiring AI solutions aligned with their business goals, now a standard in various offerings including cloud and digital workplace services. In engineering, particularly in automotive and manufacturing, there’s a growing demand for AI to boost R&D and speed up product development. Wipro supports this through its Enterprise services, focusing on developing AI models and solutions with the generative AI framework.

“AI is now moving from I would say the curiosity and experimentation stage to becoming vital to business strategy. In fact, we can confidently say that every long-term large deal now has an AI component,” Thierry Delaporte, chief executive officer and managing director, of Wipro, said during the quarterly result announcement. 

The tech giant is also working with a global healthcare insurer to develop a generative AI-powered knowledge research solution to transform the contact center to improve patient experience and operational efficiency by cutting the time it takes to analyze healthcare plan documents and response time. 

Wipro has created a generative AI powered assistant for a Fortune 500 investment and insurance company, enhancing email campaign efficiency and boosting click-through rates. The firm’s AI 360 strategy heavily focuses on growing partnerships with key players. 

Recent collaborations include Nvidia, aiding healthcare firms in developing AI-centric strategies and products, and IBM, working on joint ventures with IBM Watson X for robust AI solutions. To support these initiatives, Wipro has trained 210,000 employees worldwide in AI, introducing customized learning programs for various roles and functions.

“Our goal is to ensure that everyone at Wipro has the skills to fully leverage AI in their everyday work and for AI-related client projects. We are accelerating generative AI adoption internally by integrating the technology across our entire portfolio of platforms,” he added, stating it is resulting in quality and productivity improvements across HR, marketing, and sales operations, as well as software development, and quality engineering and testing. 

However, just like its contemporaries Infosys and TCS, the company did not mention the revenue it has gained or is expecting from investing in generative AI although it is “confident that we have the right vision, the right strategy, and the right leadership to continue to grow and keep us competitive, resilient, and ambitious.”

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For Indian IT, the year 2023 unfolded as a narrative of paradoxes and challenges. While luminaries like TCS, Infosys, HCLTech, Wipro, and Tech Mahindra celebrated record-high deal wins, the overarching ambiguity surrounding revenue growth cast a shadow over the sector’s trajectory for the entire year. 

Industry pundits, reflecting on the incidents of 2023, echoed sentiments of a sector grappling with its weakest performance since the recession of 2008. In the midst of this uncertainty, the beacon of hope for the Indian IT sector emanates from the realm of generative AI. 

Can 2024 be the year of AI deals?

Pareekh Jain, CEO of EIIRTrend, predicts that around 2% of the revenue in the coming year would be through generative AI directly. He also highlighted how AI was one of the positive things in 2023 for Indian IT, and this would influence a lot of partnerships and deals in 2024.

On the contrary, the $1.5 billion Infosys AI deal that got cancelled would also play a major impact in the industry. “A lot of companies would realise that moving too fast and investing in technologies would not be ideal. Thus, they would move with a lot of caution,” said Jain. But he believes that deals would definitely be a big focus this year.

As industry analysts predict a transformation from Q3 onwards, a nuanced narrative of deal divergence and recalibration unfolds. Large deals are anticipated to derive impetus from vendor consolidation, steering away from conventional digital transformation paradigms. 

As generative AI emerges as a focal point of interest, its potential impact on revenue is forecasted to crystallise in the third quarter of 2024. Jain said that though in 2023 AI was not the focus of deal in Indian IT, it was one of the biggest factors of the deals. “Generative AI could also be a deal breaker in 2024,” said Jain, highlighting that it would be the focus. 

That said, direct generative AI focused deals would definitely be the focus. “More than 50% of the deals would be directly influenced by generative AI,” said Jain.

For example, HCLTech announced a slew of new deals, where it will be involved in digital and cloud transformation, alongside generative AI initiatives. TCS also predicts that Indian IT firms would be a major focus globally and expects a lot of new deals in the year, along with 12 million more net jobs by 2025. 

LTIMindtree has expressed its commitment to integrating generative AI into its products and solutions, revealing that they have participated in more than 100 discussions and currently have over 20 active engagements with clients.

Wipro has doubled the number of customers as compared to the last quarter, and would focus on large deals in 2024. HCLTech is working with a handful of customers with generative AI projects, while LTIMindtree is engaged in over 20 clients for generative AI.  

Infosys, along with a few other parties including Elon Musk, AWS and others donated USD 1 billion to OpenAI. TCS and Wipro also announced generative AI capabilities in partnership with Google Cloud.

A lot in the pipeline

Companies have actively discussed various ongoing experiments and proof of concepts (PoCs) in their pipelines. In the previous month, Accenture disclosed an industry-leading generative AI pipeline valued at $450 million in new bookings, a significant increase from the $300 million reported for the entire fiscal year of FY23. 

This along with a $3billion investment in AI for three years. The company anticipates a shift from general AI experimentation to more proof of concepts and pilot projects in 2024.

Similarly, TCS reported having over 250 generative AI opportunities in its pipeline, Infosys is engaged in over 50 active generative AI projects, and HCLTech is involved in more than 140 generative AI PoCs at various stages. 

However, the caveat is that these PoCs are still in the pre-production stage and are far from generating immediate revenue. Analysts believe that only 10% of the PoCs will move to production. Considering this, a rapid recovery in the IT services sector in 2024 seems unlikely. 

Analysts from Kotak note that despite high expectations for a recovery in discretionary spending in 2024, enterprises across most sectors are still focused on cost reduction. Many have set cost-saving targets extending into 2024, and the reprioritisation of spending toward areas of investment is not yet complete.

2023 continued?

During the earnings call, CP Gurnani, former managing director of Tech Mahindra said, “Tech Mahindra is now working in about 60 customer locations on actually using generative AI to enhance operations, innovation, and productivity.” 

On the other hand, Indian IT firms have also largely stopped hiring freshers. This trend might continue this year, along with rampant possible layoffs.

In the initial half of fiscal year 2024, the top-tier IT firms collectively shed 39,000 employees, signalling a strategic recalibration in response to evolving market dynamics. Delays in lateral hires and adjustments in compensation strategies underscored a pragmatic approach to talent acquisition.

Overall, the Indian IT majors have trained close to seven lakh employees in generative AI, in partnership with companies like Google, Microsoft, Oracle and NVIDIA. The monetary impact of the same would be on the forefront of discussions in 2024.

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In its recently announced earnings call, global IT giant Accenture revealed that despite revenue growth of a mere 3% with $16.2 billion, it made upwards of $450 million in new bookings from GenAI applications alone, including a deal with McDonald’s and BBVA, amongst others.

The earnings from GenAI, up 50% from $300 million in the previous quarter, indicate Accenture’s early leadership position in GenAI compared to regional IT providers. The bold proclamation of such a strong number also makes them stand ahead, infusing market confidence in the company. 

“With respect to GenAI, I just want to say $450 million in sales this quarter, we’re very pleased with. It demonstrates we are leading here,” said CEO Julie Sweet.

On the other hand, industry experts anticipate that gen AI’s contribution to the top IT firms’ overall revenue to be less than 1%, even with an increasing number of pilots and partnerships in this emerging field. Apurva Prasad, Vice-President of Institutional Research at HDFC Securities, observed, “The overall scale of AI deployments across sectors…is quite strong. However, generative AI’s contribution as part of it remains small for the time being.” 

Furthermore, in comparison, Indian IT companies like TCS, Infosys, Wipro, HCLTech, and LTIMindtree haven’t released any GenAI-specific numbers indicative of their roadmap or growth indicators. Instead, these companies have focused on partnerships with giants like Microsoft, AWS, and Google. They are focused heavily on employee upskilling and injecting significant investments, with companies like Wipro planning $1 billion in AI over three years, and launching the Wipro AI360 ecosystem. 

GenAI Integration with Overall Strategy

Accenture incorporates GenAI within its broader digital transformation strategies for clients, ensuring alignment with their overall business goals. CEO Julie Sweet emphasised that GenAI is not plug-and-play, but a sophisticated technology requiring deep understanding to be effectively scaled.

“And this is Accenture’s leadership position, right? We have a strategy, consulting, deep industry and functional expertise,” added Sweet, underscoring Accenture’s unique position in this evolving field.

Experts predict GenAI bookings could exceed $4 billion in FY24, with Accenture poised to capture a significant share, backed by its $3 billion investment in data and AI over three years aimed at scaling client value in 2024. The company derives confidence to go all in from its experienced cloud journey

In the realm of acquisitions and partnerships, Accenture’s collaborations with major industry players boost its capacity to merge technology with business value. Sweet foresees 2024 as a pivotal year, transitioning clients from experimentation to scalable GenAI applications.

“Think of 2024 as being the shift for our clients from experimentation to scale, and we believe we’re in the best position to lead that shift to value.” 

Accenture is actively integrating GenAI in client projects, such as developing a GenAI-powered financial coach for BBVA and enhancing content production for a global hospitality group. A key project with McDonald’s focuses on integrating cloud technology and GenAI to revolutionise customer and employee experiences.

The company’s expansion strategy in the space is also marked by significant acquisitions across various regions, totalling $788 million, enhancing cloud capabilities and strengthening its AI expertise. Notably, the acquisition of Ammagamma adds 90 AI specialists to Accenture’s team, contributing to its goal of doubling its skilled data and AI practitioners to 80,000.

Previously,  the company had invested in a total of 11 AI-related businesses, of which three are from India: Flutura, Bridgei2i, and Byte Prophecy, with Flutura being the most recent investment.

A Good Omen for Indian IT

Indian IT companies have also shifted their focus to building a skilled workforce and ramping up their investments in GenAI as clients have shown a willingness to fund early PoC projects—leading to a new wave of collaboration between service providers and their clients to explore GenAI’s potential.

Indian IT majors have trained nearly seven lakh employees in GenAI. TCS has over 100,000 GenAI-ready employees, according to Milind Lakkad, executive vice president and global head – human resources. Infosys has trained 57,000 employees, while Wipro has trained 180,000. HCLTech and LTIMindtree are also focusing on training their employees in GenAI.

Infosys has launched Topaz, focusing on GenAI tech, with CEO Salil Parekh stating the company is engaged in 80 GenAI projects. Meanwhile, Coforge introduced Quasar, a GenAI platform with over 100 cognitive and generative use cases, and LTIMindtree launched Canvas.ai to help clients scale their GenAI capabilities.

Additionally, Accenture, which follows a September to August financial year, disclosed that its GenAI project bookings constitute approximately 2.4% of Accenture’s total workload—which accounted for only 0.6% during the March-May period. This indicates an acceleration in momentum and increasing revenue for the industry.

However, A researcher from a Mumbai-based brokerage, requesting anonymity, said GenAI use cases might eventually lead to faster monetisation, but not immediately. They added, “At least the second half of this fiscal will remain without any major deals in generative AI for any of India’s IT outsourcers.”

The economic downturn has also impacted Indian IT stocks. Shares of TCS, Wipro, and Tech Mahindra have declined by 2% since September end, while Infosys’ shares have stayed flat. HCL Technologies, on the other hand, has seen growth, attributed to its mega-deal wins and a strong engineering practice.

Amid these challenges, Infosys and HCL Technologies have revised their annual revenue growth projections downwards. Infosys has reduced its growth outlook to 1-2.5% for this fiscal year, while HCL has adjusted its guidance to 4-5% organic growth. Wipro indicated a potential revenue contraction of up to 3.5% for the current quarter.

Analysts also expect IT services expenditure to remain muted in the near term as businesses typically decide their annual budgets only after February. Accenture itself has pointed to slower budget-related decision-making, especially in tech and media companies, setting its q2 target to -2% to 2%. Hence, while gen AI holds promise, its current impact on revenue growth in India’s IT sector seems limited amid the industry’s ongoing struggle with global economic uncertainties and conservative client expenditure. However, it will be interesting to see how earnings from GenAI pan out for Indian IT as the quarter approaches.

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Wipro has announced the launch of a new Centre of Excellence (CoE) on Generative Artificial Intelligence (AI) in partnership with the prestigious Indian Institute of Technology (IIT) Delhi. 

The Wipro CoE on Generative AI is anchored within the Yardi School of Artificial Intelligence (ScAI) at IIT Delhi and will support foundational and applied research, nurture talent, and expand the state of the art in this critical field.

The partnership underscores Wipro’s commitment to driving ongoing innovation in emerging technologies and is part of the company’s USD 1 billion commitment to accelerating AI-led innovation as part of the Wipro ai360 ecosystem.

The CoE will serve as an R&D hub, bringing together Wipro researchers with ScAI faculty members and graduate students to address at-scale real-world problems. Wipro CoE teams will jointly work on building innovative solutions using AI, ML and other technologies.

“Collaborating with the eminent and multidisciplinary faculty at IIT Delhi and its research partner ecosystem will help us realize our vision of Engineered Prosperity faster,” Dr. Ajay Chander, Head of Research & Development at Wipro Limited, said. 

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Wipro’s ambition to train its 250,000 strong workforce on generative AI shows its commitment towards leveraging the technology. In fact, Wipro established its generative AI practice over two years ago, according to Subha Tatavarti, chief technology officer at Wipro Limited. “For more than two years we have been engaged in research programmes with research institutes like AI Institute at University of South Carolina and IIT Patna, to build domain specific language models. These initiatives are helping our customers accelerate medical research and provide better medical care to patients,” she told AIM, in an exclusive interaction.

As an enterprise, Wipro has fully embraced generative AI and its potential impact on its business. The IT giant is engaged with several leading companies across a wide variety of industries to develop centres of excellence by leveraging its consulting expertise and also its foundational research knowledge through academia partnerships.

Besides, Tatavarti revealed that Wipro has developed its own fine-tuned Large Language Models (LLMs) which sets them apart. “This allows us to leverage the rapid advancements made in foundation LLMs, while focussing our efforts on refining our models to remain versatile and future-proof.”

This unique approach allows Wipro to develop intellectual property (IP) that is not only robust and adaptable but also applicable across multiple domains. Tatavarti further revealed that Wipro will integrate Google Cloud’s full suite of generative AI products and services—including Vertex AI, Generative AI App Builder, and the Model Garden collection of foundation models—with its own AI intellectual property (IP), business accelerators, and pre-built industry solutions. 

“As part of the partnership, Wipro will build generative AI as a core solution within its extensive set of consulting services, which include digital marketing, customer experience, design thinking, and financial services, as well as within its global innovation labs (Lab45). Additionally, Wipro will leverage its crowdsourcing platform, Topcoder, to build and scale solutions that address client challenges,” said Tatavarti. 

How generative AI is benefitting Wipro’s customers?

Recently, the IT giant announced Wipro ai360, a holistic and AI-centric innovation ecosystem aimed at incorporating AI into all internal platforms, tools, and solutions. “Current client applications in the generative AI space tend to centre around a few key themes- cognitive chatbots, content creation and optimisation for marketing and media, automation in code generation and synthetic data generation,” said Tatavarti. 

Currently, the IT giant is already helping a chocolate manufacturer to produce more detailed and engaging product descriptions. In another example, Wipro is working with a European multinational telecom company to unlock value from data. “Wipro is also working with multiple vendor tools and software development kits to generate high quality synthetic data, which allows the client to increase cross-border collaboration and mitigate bias and eliminate distribution limitations that exist in real data,” said Tatavarti. 

Moreover, the Bengaluru-based IT giant is also leveraging generative AI internally. “The models being used in these processes are ones that are already available for enterprise use with enterprise grade security,” she added. 

GenAI Seed Accelerator programme

Over the years, Wipro has made strategic investments in many companies. According to Tatavarti, 2/3rd of these investments have been in AI. Going forward, Wipro will only increase its investments in cutting-edge startups through Wipro Ventures. “Additionally, the company will launch a GenAI Seed Accelerator programme, which will identify the top 10 generative AI startups in Silicon Valley and Bangalore and provide them with the training needed to become enterprise ready.”

Addressing generative AI challenges

Today, not just Wipro, but almost all organisations in the world want to leverage generative AI. However, generative AI comes with its own set of challenges. “As we look to make generative AI a part of our daily lives at Wipro, we also recognize the risks that come with this technology. We have put in place several controls to help manage the risks that may arise through the use of generative AI.”

For example, Wipro has implemented a control framework that grants access to third-party generative AI tools on a need-to-know basis. For users who are into development of new generative AI solutions, etc, the IT giant has set up a dedicated ring-fenced Cloud native environment to build and train their LLMs. Moreover, Wipro is conducting training on responsible usage of generative AI tools, especially those that use enterprise and personal data, in line with our GDPR (General Data Protection Regulation) guidelines. 

“We also have responsible usage of generative AI policy formulated for all our associates. We are engaged in building solutions for detecting hallucination and AI generated misinformation. Some of the efforts in this initiative include creating large annotated multimodal datasets, developing novel entailment and diffusion-based techniques for detection, and knowledge graph based explainable automated detection systems.”

Advocating for responsible use of AI 

Wipro has also formed an AI Council focused on establishing AI development and usage standards. The council’s efforts include defining ethical guidelines to address biassed algorithms, ensure fairness, and prevent discriminatory outcomes. “Under our Chief Data Privacy Officer, we are also working towards setting the usage policies, including the do’s and the don’ts for AI Models. 

“We are looking at AI from a privacy point of view and prioritising data protection. We are working on ethical frameworks and regularly auditing AI systems for potential bias and fairness to promote responsible AI usage.” 

The IT giant is also reworking the processes to see how human and AI synergies can be tapped for intelligent automation. Tatavarti said Wipro is also keeping a close eye on the evolving regulatory frameworks across geographies, including the EU Act on AI and the Japanese regulations focused on using publicly available data to benefit society versus the individual benefits of content owners. “We are beginning to formulate geo-based strategies accordingly.”

Benefits to Indian IT

It is not just Wipro, but most of the big and small IT services companies are jumping into the generative AI bandwagon. The industry stands to benefit from LLMs code generating abilities as well as in the areas of call centres. “We also see a wave of AI services, such as AI model training, AI model hosting and vertical-specific data preparation, emerge in the next 5 years, which will be critical in helping enterprises capitalise on the full potential of AI. 

In the long term, Tatavarti believes AI will disrupt every industry, and as a result, every business will eventually become an AI business with a specific vertical focus. “Some examples of industries that will gain emergence due to generative AI include precision medicine, precision agriculture, hyper personalised marketing.”

She believes these industries will be AI led. Moreover, other capabilities, which have been touted for a long time, will finally gain emergence due to the conversational abilities of generative AI, such as true smart buildings and smart homes. 

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India’s second-largest software services exporter Infosys has informed the stock exchanges that it has entered into a new agreement with an undisclosed established client to provide AI and automation services over a period of five years. The partnership has an estimated target spend of $2 billion. The announcement pushed up the company’s stock price up by 3.6% on the Bombay Stock Exchange (BSE). 

“Infosys has entered into framework agreement with one of its existing strategic clients to provide AI and automation led development, modernisation and maintenance services. The total client target spend over 5 years is estimated at USD 2 billion,” the company said in an exchange filing on Monday. The news comes three days before July 20 when Infosys is scheduled to release the results of its June quarter (Q1FY24).

In accordance with the company’s exchange filing, the agreement includes the advancement, modernization, and upkeep of AI and automation-related services. Notably, the IT giant had recently unveiled a wide-ranging and cost-free AI certification training initiative through Infosys Springboard. This program aims to equip individuals with skills required to thrive in the future job landscape.

Infosys’ AI move underscores the growing trend of Indian IT companies increasing their investments in the field of AI. Long before OpenAI’s ChatGPT hit the scene, Tech Mahindra was already working with generative AI. Notably, the IT behemoth’s chief executive, CP Gurnani, lauded the Storicool platform—an auto content creation tool that proved ahead of its time.

In line with this trajectory, Tata Consultancy Services (TCS) made headlines with its own foray into generative AI capabilities, joining forces with Google Cloud. Furthermore, Wipro, too, has entered a partnership with Google Cloud to harness the power of its generative AI tools, integrating them with their in-house AI models, business accelerators, and pre-built industry solutions, as per the company’s announcement. This signifies a competitive shift within the Indian IT landscape.

Read more: How Indian IT Giants are Bringing GenAI to Their Clients

The post Infosys Signs Mega AI Deal Worth $2B, Shares Rise Over 3% appeared first on AIM.

Wipro has decided to invest $1 billion towards the enhancement of AI capabilities within the next three years. The IT giant has also unveiled Wipro ai360, a holistic and AI-centric innovation ecosystem aimed at incorporating AI into all internal platforms, tools, and solutions provided to clients.

Wipro is also set to introduce the GenAI Seed Accelerator program, which aims to prepare select generative AI-focused startups for enterprise-level operations through training. To achieve these objectives, Wipro plans to educate all of its 250,000 employees on the fundamentals of AI and responsible AI usage within the next year. Furthermore, the company will offer specialised and ongoing training programs tailored to employees in AI-related roles, just like what Infosys did recently.

Wipro’s AI Ambitions

The investment of $1 billion will support the advancement of Wipro’s AI, data, and analytics capabilities, as well as its research and development efforts. It will also contribute to the enhancement of FullStride Cloud and the development of new consulting capabilities, enabling clients to adapt to change and harness the benefits of AI. 

The inclusion of Wipro’s innovation center, Lab45, within the Wipro ai360 ecosystem will play a crucial role in delivering clients with the necessary resources to enhance their utilization of artificial intelligence. Lab45 will offer expertise, training, scalability, and research opportunities, enabling the acceleration of AI adoption through collaborative innovation.

Indian IT’s Big Bets on AI

But this is not the first time that Indian IT has decided to create an AI suit. 

Tech Mahindra also introduced its Generative AI Studio as part of its amplifAI0->∞ range of AI solutions and services to make AI accessible and adaptable for enterprises worldwide. The studio is designed to consolidate six key areas of content generation, namely: programming code, textual documents, images, videos, audio, and data. This initiative aims to streamline and centralise the process of creating various forms of content using AI.

Back when AI was not even a buzzword, Infosys had donated $1 billion to ChatGPT maker OpenAI along with the likes of Elon Musk, AWS and more. The IT major also has a new platform called Topaz that uses generative AI technologies to help businesses automate tasks, improve customer service, and enhance security. Topaz comes with 12,000 use cases and is designed to be easily integrated into existing business processes.

The post Wipro Invests $1 Bn to Upskill Employees on Gen AI appeared first on AIM.

In 2018, our Supreme Court struck down Section 377 of the Indian Penal Code, decriminalising homosexuality — a major victory for LGBTQ+ rights in the country. Since then, the tech industry has made several attempts to make it more inclusive for them. 

Indian IT Rewrites the Inclusivity Code

Interestingly, TCS was one of the first Indian IT companies to tweak their insurance policy to include same-sex partners and redefine the policy with the use of ‘partner’ instead of ‘husband/wife’, broadening the scope. Tech Mahindra recently organised a pride walk at their Bengaluru campus to celebrate the Pride month and show support and solidarity to the LGBTQIA+ community with participation from its employees, allies, and community members. Tech Mahindra also supports the community through initiatives such as 12 weeks of paid same-sex adoption leave, bereavement leaves for same-sex partners, support groups, diversity and inclusion training, and visible LGBTQ+ leadership.

Similarly, Infosys’ initiatives include an enhanced Health Insurance Plan covering partners and gender confirmation surgeries, a learning program called #AllyForChange, an employee resource group called IPRIDE, focused on creating a safe and inclusive workplace and promoting education on sexual orientation and gender identity, and more.

Besides health insurance, one of Wipro’s key initiatives in this space is ‘Open Hearts Open Minds’, using real-life stories to raise awareness about appropriate language and behavior towards LGBTQ+ colleagues. They have implemented measures such as a Gender Affirmation Policy, Gender Transition Guidelines, and a Gender Neutral Anti-Sexual Harassment policy to create a welcoming workplace for queer employees. HCL Tech, the other Indian IT giant promotes LGBTQ+ inclusion through initiatives like Pride@HCLTech ERG, support for Out & Equal Workplace Summit, non-discrimination policy, LGBTQ+ training for employees, and partnerships with organisations like Human Rights Campaign, Trevor Project, and GLAAD.

Unravelling the Ground Reality

Over the span of the past two months, AIM reached out to numerous employees within renowned tech companies (not just IT) in India who identify as queer individuals. The purpose of this initiative was to gain firsthand insights into the ground reality and understand the experiences of LGBTQ+ members within the country’s tech giants.

The identities of both corporate entities and individuals have been anonymised, to protect privacy.

Initially, AIM faced a notable hurdle as individuals were reluctant to openly discuss the issue, citing company policies. 

Despite these constraints, a common thread emerged from all the respondents: while management had implemented initiatives with good intentions, a pervasive problem of homophobic mindsets persisted among co-workers.

The crux of the issue appeared to stem from the prevalence of petty homophobic jokes that is always there. These derogatory comments along with microaggressions, may not seem like a big deal at first, but the impact of these ‘harmless’ jokes goes beyond the moment, contributing to a broader culture of discrimination and intolerance within these tech companies.

Never-ending Peril for Sexual Minorities 

TW: Rape, Violence

Living a life that is marred by relentless bullying and harassment is far from easy. Inspite of 4 years of decriminalisation of homosexuality, India is still not safe for the sexual minority.

Two youths gang-raped a 19-year-old transgender person in January in Bhiwandi. A woman who identified as lesbian was forced to go through conversion therapy and marry a man until the court had to step in to provide protection. Last year, a transgender woman was forcefully taken from a government shelter in Noida and assaulted by the police. A transgender woman, Udhaya, was attacked in Tamil Nadu’s Tirunelveli district by her partner’s family. The list of violence against the LGBTQIA+ community is endless. 

Today is the last day of June, the month of ‘Pride’, which brings with it vibrant expressions of support and inclusion. Instagram has rolled out new rainbow features. On Twitter, a simple ‘like’ transforms into a burst of rainbow colours when you engage with queer-related tweets. During this time, numerous companies alter their logos to stand in solidarity with the LGBTQ+ community. Although these efforts are made with a positive mindset, for most, it is reduced to a marketing gimmick. 

It is crucial that we take a more comprehensive approach to address the underlying issues. Merely implementing policy changes and making token gestures is insufficient to combat the deep-rooted biases that still exist within our workforce.

The least we can do is be mindful and respectful of someone’s preferences. Your ‘harmless jokes’ on someone’s whole identity are actually not harmless.

Read more: Indian Tech is Still Oblivious to Gender Inclusivity

The post Behind Indian IT’s Mixed Emotions for LGBTQ+ appeared first on AIM.

“Anxiety or Enthusiasm?” – asked Emily Chang at the Bloomberg Technology Summit.  

“You need to have both – the thoughtfulness, the understanding, the nuance, and the tension between the two exists everywhere,” said Sam Altman, sharing his experience after travelling the Far East, speaking to users, developers and world leaders. 

Altman’s observation pretty much sums up generative AI adoption in enterprises, globally. It has been creating quite a bit of stir for enterprises, fuelling both enthusiasm and anxiety. 

AIM got in touch with technology heads and CXOs of leading companies across industries, alongside tracking the trends, to understand their adoption strategies, and the answers were quite surprising. Unlike previous AI adoption, which were mostly top-down, generative AI adoption seems to be being pushed in all the directions – i.e. top-down as well as bottom-up. 

Bottom-Up Approach 

Ironically, this is also the first time in the history of AI adoption where the bottom-up approach is gaining immense traction, where employees and teams come together, identify opportunities with use cases and PoCs, and are later supported by top management. 

This is mostly driven by enthusiasm. 

Most of the startups and growing companies fall under this category. These organisations are mostly experimenting with generative AI to address needs that benefit the company and their customers. Hopefully, along the way it might improve efficiency and increase productivity. Some of the examples include Swiggy, MakeMyTrip, Tech Mahindra and others. 

Amitkumar Banka, head growth marketing at Swiggy told AIM that the company is using generative AI to create customised food images based on specific requirements on their platform, and this is helping them serve millions of customers.

“From a Swiggy perspective, it is a bottoms up approach. Most teams, including analytics, product, design, corporate strategy have come together to form a strong point of view in terms of how Swiggy should take generative AI to the next level. Each person and team are coming up with their own use cases to take advantage of generative AI.” 

Narasimha Medeme, VP head data science at MakeMyTrip, said that the company has launched conversational bot using combination of generative AI LLM models plus speech to text models for Bharat customers (English and Hindi), and has also embedded usages in SEO and hotel review NLU systems. “Multiple other use cases and bots are being tested in beta stage for Bharat customers.”

Top-Down Approach

Top-down approach has always been a go-to strategy for most companies, as it is faster and easier to consult and adopt. For instance, of late, a lot of IT companies – the likes of TCS, Infosys, Wipro, Cognizant, Accenture, and others, are partnering with Microsoft and Google to unleash their generative AI initiatives, alongside other technology enablers like Oracle, SAP, Salesforce and Zoho. 

The adoption trickles down from the top. Qlik SVP Geoff Thomas believes that if a company wants to adopt a data culture and become a data-driven company, it would require strong sponsorship and support from the highest level of leadership. “It is often driven from the CEO, from top to bottom.” 

But, there is a flipside to this, this might be exciting for people on the top or leadership team to improve their efficiency and productivity, but it often fuels anxiety among employees and teams, particularly those who have been familiar with traditional methods and productivity tools. 

This also requires additional push from the organisation to offer training and certification programmes. Recently, Infosys announced a comprehensive and free AI certification training programme.

Hybrid Approach 

Here, most companies are following both top-down and bottom up approaches, alongside setting up a centre of excellence to fuel generative AI use cases. Some of the examples include HCL Tech, Infosys, Zoho, and others.

Infosys recently unveiled Topaz which is a set of solutions and platforms using generative technologies with 12000 AI use cases, and 150+ pretrained AI models. 

Wipro is also dwelling on a hybrid route. The company has partnered with Google Cloud to leverage its generative AI tools. Wipro will also integrate them with their own AI models, and pre-built industry solutions. 

So, What’s the Best Approach? 

In conversation with AIM, Ramprakash Ramamoorthy, Director – AI Research, Zoho Corp. vouches for hybrid approach, where he believes that the right mix of narrow and large models will be a win-win for companies and their customers. 

“Narrow AI, where one model is trained to do one task based on past experiences will thrive, helping companies automate redundant tasks. Whereas, LLM-based generative AI will augment these capabilities by offering seamless availability of information from across sources.” 

Zoho has a suite of 13 applications that is integrated with ChatGPT. “ Our focus right now will be to tightly integrate our AI stack across our product suites and also, in parallel, build in-house LLMs for businesses to provide seamless user experience in our offerings,” said Ramprakash. 

Each industry has its way of implementing generative AI in their functions. Deepika Kaushal, Deputy Vice President at Piramal Finance, confirmed to AIM that their company is still identifying use cases for generative AI applications and it is better for them to learn from the experts and later in future learn the capabilities to build in-house. 

On the other hand, Vivek Sahabadi, Head of Data Analytics at Navi, is of the opinion that the kind of data a company handles decides the right approach. “For fintech companies, where user data is critical, building their own models makes sense, whereas, in industries such as food tech, external models can be used.” 

All in all, it becomes important for companies to consider factors such as costing, expertise, data security, and in-house infra capabilities, before diving into the adoption of generative AI. Most importantly, the usefulness or second order understanding of generative AI should be established. One must not recklessly rush into it, irrespective of whether excitement or anxiety is pushing them towards it. 

The post How Companies are Botching Generative AI appeared first on AIM.

Wipro today announced that Badri Srinivasan would assume the leadership role for its India and Southeast Asia businesses within the APMEA (Asia Pacific, Middle East, India, and Africa) Strategic Market Unit. 

Badri’s appointment, as per WIPRO, is intended to drive deeper synergies, facilitate the sharing of best practices, deliver consistent and exceptional client experiences, and scale Wipro’s ability to capitalise on emerging growth opportunities in these regions. 

Badri joined Wipro in January 2022 as Managing Director for Southeast Asia, where he consolidated strategic transformational engagements with clients while strengthening Wipro’s talent base and brand presence. Prior to joining Wipro, Badri served in multiple positions at Infosys, including Regional Head of Financial Services, for 17 years. 

As a member of the Board of Wipro’s strategic subsidiaries and acquired entities in Asia (Capco, Rizing, and Designit) and a member of Wipro’s Global Leadership Team, Badri brings a wealth of experience to his new role. 

While announcing the news, Badri said, “Enterprises across India and Southeast Asia are looking at pragmatic approaches to strengthen their market leadership and attain the desired goals of business transformation leveraging technology, going beyond cost savings. I look forward to strengthening Wipro’s positioning in these regions as a purpose-driven value orchestrator for clients, partners, and employees”.

Another addition

This announcement is part of a broader trend in the Indian IT industry, with many companies restructuring their top leadership. For example, TCS CEO Rajesh Gopinathan recently stepped down from his role and K Krithivasan was appointed as the new CEO-designate. Tech Mahindra also replaced its MD and CEO with Mohit Joshi, previously a director at Infosys. Additionally, Ravi Kumar, the former president of Infosys Global Services Organization, left the company to become the global CEO of Cognizant.

The post Badri Srinivasan to Head Wipro’s India and Southeast Asia Operations appeared first on AIM.

Analytics India Magazine’s much-lauded women-in-tech conference saw participation from over 500 attendees, 50 speakers and 200 firms. The 5th edition of ‘The Rising 2023’ featured inspiring stories of women from different backgrounds over two days. 

The power-packed event concluded with the ‘Best Firms for Women in Tech Awards’ that recognises companies that have implemented successful programs to promote diversity, provide equitable opportunities for career growth, offer coaching and mentorship to women, and help close the gender pay gap. Sagarika Ghose, the renowned award-winning journalist and author, handed over the awards on behalf of AIM.

Let’s take a look at the winners.  

Genpact

Genpact fosters an inclusive culture by offering paid leave and supportive resources for working parents. It actively pursues diverse talent through campus recruitment and partnerships with minority organisations. The company also sensitises its hiring teams through unconscious bias training and inclusive language practices.

Lowe’s 

Like Genpact, Lowe’s prioritises an inclusive workplace for women associates, offering equal opportunities for career growth and implementing programs to address the barriers before and after joining the workforce. They prioritise equity over equality to ensure all associates have the resources they need to succeed.

Verizon Data Services India Pvt Ltd (Verizon India)

An early adopter of the Maternity Benefit Act, 1961, Verizon Data Services leads in diversity and inclusion and adapts to changes in maternity benefits. It launched the ‘WINGS’ program in 2016, supporting women returning to work after a career break and addressing hiring biases.

Futurense Technologies

Futurense values and supports its female employees throughout their lives, and this includes even those on a career break. They prioritise potential over current capabilities in hiring and have achieved gender equality in their leadership team. The company values diversity and has initiatives to support women from Tier 2 and Tier 3 cities, offering free accommodation and mentorship to those relocating for work.

TheMathCompany Inc

Joining the winners is TheMathCompany, which offers inclusive parental leave, and period leave and is committed to diversity, equity, and inclusion. Its DE&I team conducts research, advocacy, and training on leadership awareness and unconscious bias programmes. The company supports employee resource groups and offers annual medical check-ups, with a special package for women.

Wipro

Wipro has a policy for holidays, time off, and parental and adoption leaves. They also have a program called ‘Begin Again’ for women returning to work. Wipro ensures equal employment opportunities for all and supports gender equality and women’s empowerment through the ‘UN Women Empowerment Principles’.

Continental Automotive Components – Technical Center (India)

Continental Automotive Components is dedicated to gender diversity and inclusion, with successful strategies to promote women in tech. They started Launch-Pad, a six-to-nine month program under which they hired 16 women on career breaks up to five years, providing on-the-job training, technology learning, and mentoring.

Fractal Analytics

Fractal prioritises diversity, equity, and inclusion in the workplace. They offer unlimited leaves and a gender-neutral program, ‘ReBoot’, for those transitioning back to work. Additionally, an AI chatbot supports employee well-being and active listening.

ABInBev 

ABInBev is our next winner for promoting diversity, equitable career growth, closing the gender pay gap, and offering various leave options for primary caregivers. They also have a ‘Ramp On’ program for returning mothers and several benefits, including enhanced maternity coverage and support for childcare and elderly care.

DBS Technology Services 

DBS is committed to supporting women. Their key initiatives include a grievance redressal policy, women’s security sessions, an emergency safety service app, and the ASCEND program offering coaching and mentorship. They also run the MyPersona women leadership development program, graduating 11 women in 6 years.

Tata AIA Life Insurance

Tata AIA Life Insurance promotes diversity and inclusion in the workplace through programs that support career growth, coaching and mentorship, and work on closing the gender pay gap. They provide extensive support to employees, including maternity leave, medical aid, emergency funds, and flexible work hours. Women employees also have access to specific programs and leave options. 

LTIMindtree

The next winner, LTIMindtree values and supports their female employees through extensive leave policies, prevention of sexual harassment training, gender pay parity, and work-from-home flexibility. They also have a women-specific community for support and engagement in career development and well-being.

Sify

Sify prioritises diversity, equity, and inclusion in their workplace by empowering and uplifting women. They’ve taken various actions to provide equal opportunities, such as reviewing budgets to prioritise hiring women, creating referral programs, and participating in hiring events for women.

The post The Rising 2023: Best Firms for Women in Tech appeared first on AIM.

On February 14, Rishad Premji, the chairman of Wipro—one of India’s leading IT companies—tweeted a quote by Bill Marklein saying, ‘Culture is how employees’ hearts and stomachs feel about Monday morning on Sunday night’. 

However, recently Wipro rolled out revised call letters to the freshers who were waiting for their joining letters for the past 12 months, with lower salaries from previously promised. The freshers, who were supposed to get a salary of INR 6.5 lakh, are now getting a reduced pay of INR 3.5 lakhs. The move is widely considered as unethical. 

A move, which is in stark contrast to what Rishad had said when his father, Azim Premji, retired. In a letter to the employees, Rishad Premji had said that “the greatest strength of Wipro is our people”. 

Not the first time

This is not the first time Wipro has been at the centre of a controversy regarding freshers. Previously, it had come under fire for revoking offer letters to recruited freshers. Lately, Rishad Premji has also been making waves for his controversial statements and actions.

His views on the work culture in the IT industry have caused a stir, with some applauding him for his honesty while others criticising him for being impulsive.

In one of his recent interactions with the media, Premji expressed his views on work-from-home culture saying that employees have to come back to the office. While he was of the opinion that the hybrid work culture is the future, he emphasised the importance of physical offices, further arguing that they help in better coordination and teamwork. 

Premji further said that the hybrid work model has made the industry “spoilt” and that staying connected is vital. This statement has been met with mixed reactions, with some people agreeing with Premji’s assertion that physical offices are necessary for effective collaboration and communication while others think that remote work has proven to be just as effective, with Infosys asserting that the hybrid work culture is here to stay. 

Even Wipro’s own workers felt that remote work culture is not going away anytime soon.  In a blog posted on Wipro’s website, the company points out that the work culture has changed drastically in the last year and it’s essential to recognise that the new work model is here to stay. 

Moonlighting and Premji

Earlier also, Premji faced criticism for his comments on moonlighting, which he referred to as ‘cheating’. Taking to Twitter, he’d said, “There is a lot of chatter about people moonlighting in the tech industry. This is cheating, plain and simple”.

He later clarified his statement, explaining that he was all about transparency and that organisations should have candid conversations with their employees about side gigs and personal projects. 

However, it was not much later when the tech giant fired over 300 employees who were reportedly moonlighting. He emphasised that it was important to ensure that such activities are not in conflict with the company’s interests.

Premji’s impulsive nature came into the light when he fired a senior employee within ten minutes over the issue of integrity. He claimed that the policy related to integrity is black and white and that employees who violate it cannot continue working in the company. 

“There is a zero-one policy for any form of integrity violation, any form of harassment. You can be me in the company and I won’t have a job if I violate one of those two,” Premji had said.

While some people concur with Premji’s no-nonsense approach to employee conduct, others feel that he is too impulsive and quick to fire people.

Why so influenced?

Moreover, Premji’s influence and power in Wipro is questionable since he technically does not possess any power in the day-to-day functioning of the company. This is in accordance with SEBI’s rule which directs the companies to not appoint any executive director as the chairperson of the board. 

Following that rule, Wipro had then issued a statement saying “Rishad A Premji will cease to perform any executive role in the company and continue in the capacity of non-executive director of the company, such that the company remains compliant with the listing regulations in force at all times”.

The post Meet the Impulsive Genius of Indian IT appeared first on AIM.

In 1945, MH Hasham Premji set the ball rolling for Western India Palm Refined Oils Limited, better known as Wipro. Since then, the company has tested the waters in a slew of fields, including digital transformation, technology consulting, IT outsourcing, and many more. Wipro, in particular, has a strong focus on digital transformation and has a wide range of offerings in areas such as artificial intelligence, cloud computing, and data analytics. 

The year 2022, however, has not been the best year for Wipro. The company made headlines when its profit plummeted, attrition peaked, and it sacked nearly 300 employees for moonlighting. Wipro’s stock, too, couldn’t perform, dropping 45% in the past year, which is one of the largest falls for tech companies in India. 

On the bright side, Wipro announced a 40,000 sqft innovation studio in Texas and joined hands with Pandorum to develop regenerative medicine with AI. 

Let’s review the year that was, for the world’s seventh-largest technology service provider company – Wipro. 

Moonlighting and Wipro

In 2022, Wipro gained most media attention when its executive chairman Rishad Premji kicked off the controversy over moonlighting, terming it “cheating, plain and simple”.

According to reports, Wipro fired 300 workers to tackle the moonlighting ‘menace’. Premji claimed there was no room for someone to work for both Wipro and its rivals. If competitors learned about it, they would feel the same way, he asserted. “Therefore, I stand by what I said, that any employee who moonlights in any way, shape, or form is breaking the law,” Premji said. 

To read more about it, click here. 

Wipro profit plummets

Wipro’s Q2 results showed a rather poor performance compared to other WITCH companies. With its profits dropping by 9.3% and year-on-year revenue growth of 13%, Wipro’s performance has been rather unsatisfactory. At Q1 results too, we saw its profit drop by 21%. Wipro claimed the profit reduction was merely a reflection of changes in their operating margins.

However, compared to the same period last year, the company’s consolidated revenue increased 14.6% to Rs 22,540 crore from Rs 19,667 crore. According to a filing from the company, the operating margin for IT services for the reviewed quarter was 15.1%, up 16 bps over the previous quarter.

To read more about it, click here. 

Wipro announces 40,000 sqft Innovation Studio in Texas

When it comes to innovation, the tech giant is taking great strides. Wipro, a global leader in technology solutions, recently announced the opening of its latest Innovation Studio in Austin, Texas. This cutting-edge facility will be a hub for experimentation, collaboration, and client service, drawing on a diverse array of transformative technologies. 

From artificial intelligence and 5G, to mixed reality and blockchain, the Innovation Studio will be a melting pot for innovation. It will also leverage the power of multi cloud, edge computing, crowdsourcing, and robotics to bring new solutions to life. And Wipro isn’t doing it alone. The company will be partnering with some of the top technology partners in the industry to make this happen.

To read more about it, click here. 

Wipro and Pandorum join hands to develop regenerative medicine with AI

Wipro is also making waves in the world of AI and medicine! The company recently announced a long-term partnership with Pandorum Technologies, a leading biotechnology company based in Bengaluru. Together, they aim to develop technologies that reduce the time-to-market period and improve patient outcomes during regenerative medicine’s R&D and clinical trial phases.

This exciting partnership will leverage the power of Wipro Holmes’ AI platform and Pandorum’s expertise in tissue engineering and regenerative medicine. Wipro Holmes will be predicting and improving the effectiveness of therapeutics, offering insights to create specific formulae and helping with study design in the field of medicine.

To read more about it, click here.

The post 2022 in Review: Wipro Got a Mixed Bag, Will Tensions Spill Over to 2023?  appeared first on AIM.

After Twitter, Meta and Google and other tech companies, Adobe has joined the list of tech companies that have laid off employees to cut costs.

It has laid off nearly 100 employees in domains concentrated on sales. The company, however, said it is not doing mass layoffs and is still hiring for critical roles. As per its Q3 2022 financial report, Adobe employed nearly 2,700 workers.

However, the scale of layoffs at Adobe is much less than companies like Meta, Amazon and Twitter. For example, in June 2022, Internet streaming giant, ‘Netflix’ laid off 300 employees—i.e., 4% of its workforce in the second round of job cuts. 

In July, Tesla laid off 229 annotation employees from its Autopilot team and shut down one of its US offices. In early November, Twitter laid off nearly 50% of its workforce and 4400 contractual workers, while Meta laid off nearly 11,000 employees comprising a little over one-tenth of its global workforce. The layoffs were the first major reductions to occur in the company’s 18-year history.

This spree of layoffs comes after tech giants such as Netflix, Meta, Amazon, Microsoft, Google parent Alphabet, and Apple have lost a combined market value of $2.5 trillion. Out of all the companies, Meta ranked the highest, where the company lost about $640 billion market cap. 

Meanwhile, Tech major Amazon is also set to fire about 20,000 employees to streamline costs.

At the same time, some Indian tech firms like BYJU’s, Josh, and HealthifyMe have also fired hundreds of employees in the last few weeks. Approximately 13,618 employees were laid off Indian startups in 2022.

For instance, edtech giant BYJU’S laid off 2,500 employees, about 5% of its 50,000 workforce. This decision by the management came after a decrease in its revenue.

Another Indian e-commerce unicorn, Udaan laid off nearly 350 employees. The company’s spokesperson said in a statement that this step was taken as a measure to achieve profitability, alongside increasing the efficiency of the business by reducing redundancies.

Indian IT wins in job stability 

At a time when product companies are choosing to cut jobs to save costs, IT services major Accenture has promoted over 60,000 employees in India out of 157,000 promotions that it distributed globally during the financial year 2022. The number of promotions grew rapidly in the last one year when the tech talent war gained momentum.

Indian IT giants Infosys, TCS, Wipro and HCL are expected to hire a total of 1.57 lakh freshers before the end of this fiscal year.

The post Adobe Joins Layoff Trend, Fires 100 Employees appeared first on AIM.

Following the widely publicised layoff of approximately 7,500 employees at Twitter, Meta also laid off more than 11,000 workers or more than 12.5% of the overall workforce. The FAANG companies—Meta (previously Facebook), Apple, Amazon, Netflix, and Google—are all product-based companies and are the ones most affected by the layoffs. It is important to keep in mind that while companies that provide services such as the WITCH (Wipro, Infosys, TCS, and HCL Tech) are regularly hiring, employees of product-based tech companies around the world are staring death in the face in the form of layoffs.

Indian product-based businesses like Byju’s, Cars24, Meesho, Ola, and Udaan are also impacted by the winter of layoffs, in addition to American product-based IT corporations. According to accounts, Byju laid off nearly 2,500 workers. Overall, product-based IT companies have trouble either selling their goods or keeping up with their product development in the post-COVID world.

While Apple has witnessed a drop in customer spending, Meta can’t justify its investment in Mark Zuckerberg’s grandiose initiative, ‘Metaverse’. While Netflix sees a decline in overall content consumers as a result of the growing competition abroad, Amazon is suffering losses as a result of rising inflation. Similar circumstances apply to Indian businesses; according to media sources, approximately 15,700 employees will be laid off solely by Indian product-based startups in 2022.

What happened at FAANG? 

Since tech companies are typically insulated from the common issues of the world, layoffs in the industry are a sign of worldwide recession. For instance, during the COVID-19 epidemic, when the majority of the world’s businesses were failing, the IT industry was earning significant profits. But in 2022, the majority of the IT companies across the globe are laying off workers in an effort to cut costs. This practice is occurring on such a large scale that a web portal was developed to assist the affected.

In light of the development of such a website dedicated to tech layoffs, one is unable to ignore that the winter has arrived for techies on a global scale. But, it may still be worth deliberating about what happened to the FAANG companies. 

The whole fiasco started when the US central bank began increasing the federal fund rate to tackle the inflation in the country. In May 2022, the federal fund rate started the streak of increasing its interest rate that continued as recently as November. 

The federal fund rate is the interest rate that banks charge other banks for lending them money on an overnight basis—typically, extra cash that is in their reserve balances.

If interest rates are not kept in check, they will soon surpass the levels seen during the dotcom bubble and the infamous 2008 recession. And as interest rates rise, borrowing costs for businesses rise concurrently—bringing about the demise of stocks that heavily rely on capital.

Since most tech companies are either unprofitable or have minuscule profits, they were unable to handle the increase in the federal fund rate. The pandemic-era interest rate cuts intended to stimulate the flow of funds into the market while also encouraging tech businesses to invest more—which ultimately turned out to be a bad move now that interest rates are at an all-time high.

How is WITCH more secure? 

There is a widely-held belief that when US stock prices decline, it has an impact on other markets. There is no doubt that Indian tech companies did experience stock losses, but the stock of one of the country’s major software firms, Tata Consultancy Services, only fell 5.4% in a year compared to the 65.8% decline for Meta.

Additionally, the WITCH companies are hiring more people than ever. Till September 2022, TCS hired over 30,000 people, and this year alone, they plan to hire an additional 11~12,000 freshers. The WITCH companies recruited nearly 105,000 new professionals in the first half of 2022.

The rationale for Indian tech businesses’ continued hiring and lower rate of layoffs is their service-based business strategy. The majority of Indian IT firms offer consulting and other services to businesses abroad; as a result, the US accounts for 40–78% of their overall income, with TCS, Infosys, Wipro, HCL Technologies, and Tech Mahindra having greater than 50% exposure. About 55% of the global market share for IT services is held by Indian companies.

These companies are also the least affected by recession as a result of this strategy. Indian tech enterprises did not experience the 2008 recession as severely as other global corporations did. Since every nation is currently spending extensively on IT services, Indian IT companies are relatively safe in the face of this slow and unstable market, according to Kodak Institutional Equities. The supply-chain and retail sectors are likely to be the most impacted by the impending global recession, not the IT or financial services sectors.

Wrapping Up

While FAANG companies are trying too hard to minimise the costs by implementing harsh cost-cutting measures such as laying off a significant portion of their workforces, it’d be interesting to see what direction Indian IT companies ultimately take to tackle the worsening economic situation. 

The companies in the product segment discussed before will likely witness a decline in profit during the recession and may continue the trend of laying off employees and reducing the size of their workforces, but the segment driving the Indian tech ecosystem—the service providers—may not witness a concurrent change in the strategy of operations.

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Leading technology services and consulting company Wipro has appointed Amit Choudhary as the chief operating officer. Choudhary is now tasked with improving organisational efficiency and driving sustainable growth. He will be managing the global business operations, delivery excellence, CIO, CISO, and enterprise risk management functions while working closely with the company leadership teams to improve customer-centricity.

“I am very excited to join Wipro, and I look forward to working with the incredible team. I hope to bring new perspectives that will further strengthen the organisation’s core business while deepening the value we offer to our clients,” said Choudhary.

An alumnus of IIT Kanpur and IIM Calcutta, Choudhary was previously working with Capgemini, where he was the chief operating officer for the financial services business unit and a member of their executive committee. He has been associated with Boston Consulting Group and Cadence Design Systems and consulted with Boards and CXOs across industries, including financial services, healthcare, pharmaceuticals, and industrial goods.  

 “With his experience and unique understanding, Wipro will continue to build a business that delivers to the needs of our stakeholders. Amit will be responsible for expanding our transformation and driving operational excellence, doubling down on what is most important to our company, and where we can deliver the greatest impact for our clients,” Thierry Delaporte, CEO and MD, Wipro.

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Amid rising inflation and economic downturn, Wipro announced its financial results for FY23 Q2. The company recorded poor performance this quarter, with profit plummeting 9.3% and 13% revenue growth, year-on-year (YoY). In the previous quarter, the profit was down by 21 per cent. 

Jatin Dalal, chief financial officer at Wipro, said that it is simply a reflection of some of the operating margin changes, which are also being reflected partially in the net income line. “On a first-half basis, we had a much higher benefit on tax, which we had in Q1 of FY22, which is not there this year. That is also impacting the first-half performance of net income,” he added. 

Throwing light on the devaluation of operating margin, Wipro chief Thierry Delaporte said that in the last nine quarters, they had grown 40 per cent as a company in a hot market amid high attrition. “I think it is the reality,” he added.  

Meanwhile, on the hiring front, Delaporte said they had made the conscious decision to invest in freshers. “We have hired in H1 as many freshers as – actually, 75 per cent of the total number of freshers we hired last year over 12 months.” Wipro has onboarded 14,000 freshers in the first six months of FY22, with a net increase in headcount of 605 in FY23 Q2. However, this is low compared to the previous quarter, where the company added close to 15,446 employees. 

He also said that they followed a strategy focussing on hiring freshers during the quarter and will continue to follow this strategy over the next quarter. At the earnings call, he also mentioned that they rolled out salary hikes and promoted 10K employees during the quarter. 

Delaporte said these are the investments because we knew we needed them to continue to improve our operating model while being able to deliver and respond to the demand. He said that this quarter, part of the utilisation is impacted by the volume of freshers. “But we have continued to optimise our capacity and delivered a significant increase in the revenue without a significant increase in our headcount. It’s actually the mirror of what we had said a quarter ago,” added Delaporte. 

Incidentally, Wipro was one of the few IT companies in India to have fired 300 employees over moonlighting. Wipro’s chairman Rishad Premji said that he stands by his comments on moonlighting being a violation of integrity ‘in its deepest form’.

Read: Indian IT takes Moonlighting Seriously 

Attrition flattens, obsessed with freshers 

Wipro’s attrition for the second quarter of FY23 stood at 23.8 per cent, compared to last year’s quarter, which was 20.5 per cent. The company’s voluntary attrition measured in the trailing twelve months for the quarter was at 23 per cent – a moderation of 30 basis points from the June 2022 quarter. 

Delaporte said that the company would see a steady reduction in attrition in the coming quarters. “I believe that we have learned to adjust to a new world where some people are working from home, and some are working at the office,” he added, saying that they have really done a good job in connecting and engaging with its employees, being part of a group. “We have had our ‘employees all gathering’ at the campus every day, and that has certainly been driving a certain stabilisation of the attrition,” he added. 

Saurabh Govil, CHRO at Wipro, said that onboarding freshers, engaging with them and showing them career paths for the next five years, both from a career and financial standpoint, has also helped stabilise attrition. “It’s three quarters in a row for us  – a moderation. What we see in Q3 will be a further moderation and contraction of attrition,” said Govil. 

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Yesterday, a meeting was held between Karnataka government and IT companies with regards to the rain havoc caused at Mahadevpura zone in Vidhana Soudha.

Karnataka IT Minister, Dr C.N. Ashwath Narayan, assured the tech firms that a permanent solution to the hurdles caused due to the torrential rains will be proposed soon. 

“A permanent solution to the inconveniences occuring in Mahadevpura zone will be found out by next year’s rainy season. The government will examine the implementation of the ‘Elcita’ model of system that is being put in place in the Electronic City in Mahadevapura zone. In addition to this, the K10 system will be implemented to ensure free flow of rainwater,” said Dr Narayan. 

The minister also informed that this region would be provided with Cauvery drinking water supply through the fifth stage of its work.

Chairperson Senapathy Kris Gopalakrishnan, State IT vision Group, also said that the government would support the industry in resolving any problem they encounter in times of such crisis.

The entrepreneurs, responding to the IT minister’s appeal, expressed that their primary concern was to bring the losses endured by them to the notice of the government. 

Representatives from big firms such as Goldman Sachs, Infosys, Wells Fargo, Wipro, Intel, Vmware, TCS, Accenture, Philips, were among the few companies that attended the meeting.

The ORCA Leadership Team along with members of NASSCOM also attended the general meeting. The government reassured that Outer Ring Road (ORR) Infrastructure challenges will be addressed with robust short-term, medium- and long-term plans. 

A general agreement was made on the ORR stretch to be dealt with at high priority, for which the government has taken feedback provided in a positive manner. 

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HCL Tech has become the third largest IT company in India by revenue, overtaking Wipro. 

The company has overtaken its competitor in terms of revenue, profits and market capitalisation by a margin, with a market cap of ₹2.5 lakh crore, compared to Wipro’s ₹2.2 lakh crore.

However, being the third largest IT company in India by revenue for the last four years, both the companies’ stocks have witnessed a massive drawdown—wherein HCL Tech’s shares fell much lower compared to Wipro. 

Besides the ever-changing market dynamics for the two tech giants, all IT stocks this year have witnessed significant drops—especially Wipro, which was widely believed to be an underperformer in this arena.

The share price of HCL Tech has fallen by 20.76 per cent, with Wipro taking a fall of 35.58 per cent. A report further claimed that the major drop in share prices could be one of the reasons behind Wipro’s diminished market cap. 

The Indian IT sector has been affected by high attrition rates, inflation, and chain issues, along with witnessing unprecedented boom for two years that led JP Morgan to downgrade the Indian IT sector and go “underweight” over revenue concerns. 

HCL Technologies was founded in 1991 and is fairly younger in comparison to its competitor, Wipro, that was established in 1945. HCL initially established itself as a maker of vegetable oils and transformed into a full-fledged IT firm only in the 1980s.

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The Indian IT sector has been dealing with an all-time high attrition rate – averaging around 25 per cent. This can be attributed to the shortage of digital talent, high demand for qualified professionals, and increased wages. What’s fascinating is – they are well able to combat the issue – and their solution is backed by technology. Let’s see how. 

Happiest Minds Technologies’ Senior Vice President and Head of CoR – AI/Analytics Ajay Agrawal told AIM that the company uses statistical analysis to look at historic attrition data. “We have used the same information to improve our hiring process and handle the attrition rate,” he added. 

Indus Net Technologies’ Head of Recruitment, Nidhi Khulbe, said that AI is helping their recruiters process the high volumes of job applications at higher speeds, improving efficiency and productivity. “Recruiters now do not have to scrutinise piles of resumes or go through the tedious job of shortlisting profiles,” she added, saying that this saves time and cost by about 10-20 per cent, as their internal number crunchers have recently reported. 

“However, we need to be cautious and use tech wisely to maintain or develop human connections through continuous improvement of the framework frequently,” said Khulbe. 

Meanwhile, Tech Mahindra said it uses AI in its services offerings in the business process services segment. Tech Mahindra’s chief strategy officer Jagdish Mitra said that it is a long-term offering to the customer as they are no longer dependent on humans. He said that this could be why their attrition remains stable as people naturally have a chance to upskill to take up higher roles. In a way, this is a talent-retention model, he added. 

TCS’s vice president HR, DP Nambiar, said that based on insights from historical trends and the future pipeline of talent profile we are losing, reasons for attrition, environment factors, and potential indicators are defined. “With modelling and predictive analytics techniques deployed on key indicators, we focus on identifying the associates with high chances of attrition and proactively intervene to retain talent. 

Analytics India Magazine reached out to Infosys, who chose not to comment. Infosys’ president Ravi Kumar S, at the annual analyst day event held last month, said that they have accelerated automation for efficiency and productivity. “We have 24,000 bots. We have something called the BOT factory, and the idea is to constantly re-baseline our productivity so that we stay ahead of the curve in winning large deals, staying competitive,” he added. 

Initiatives to reduce the attrition rate 

To curb the rise in attrition rate, many IT companies have started exploring opportunities to set up bases in their tier II and III cities. Recently, Infosys said it is setting up four new offices in tier-II cities. Accenture opened an Advanced Technology Center (ATCI) in Indore, Madhya Pradesh. IBM also announced that it would hire in cities beyond metros and collaborate with leading educational institutions. 

Here’s an overview of the attrition rate across frontline IT companies: 

Based on the latest financial reports, Cognizant has the highest attrition rate (29 per cent), followed by Infosys (27.7 per cent), Tech Mahindra (24 per cent), Wipro (23.8 per cent) and others. 

Happiest Minds noted high attrition rates in the last financial year. The company’s attrition rate stood at 22.7 per cent in FY22 Q4 from 12.1 per cent in FY21. The company said that it has been taking various steps to improve employee satisfaction and enable growth. Some steps include an additional wage revision cycle, increased engagements and a flexible working environment. 

Besides these, the company said it also focuses on employee growth and learning and development, encouraging and implementing cross and multiskilling. “We also look at 360 feedback to understand our employee challenges and aspirations and work towards them,” said Agrawal. 

Further, he said that Happiest Minds has been a people-centric organisation. “During the pandemic as well, we have been in continuous touch with the employees and supported them, aiming at the physical and mental wellbeing through Tele-medical consultations for our people, MITHRA – The Good Samaritan Program, and partnership with Silver Oak for Employee Assistance Program,” added Agrawal. 

Agrawal said they have also implemented leave donation, exclusive voluntary Covid19 insurance policy, Covid19 leave, and vaccination camps during the pandemic, ensuring our employees can fight it. He said they have taken conscious steps to involve minds in enabling and exploring the latest tools and technologies. 

“We have maintained industry benchmark retention rate, which is lowest among peers across all quarters of FY22,” said TCS’ Nambiar. TCS believes that empowering culture, philosophy of investing in people, career growth opportunities, and progressive HR policies have resulted in consistently high retention levels. In addition, its investments in organic talent development and initiatives like Contextual Masters and Elevate have further reassured employees that the company values them for the contextual knowledge they possess. 

Nambiar said that Elevate has specific targets for employees with different experience levels and correspondingly improved pay packages. He said that these efforts have made TCS the employer of choice and its employee retention record an industry benchmark. “Employee health and well-being measures, SBWS work arrangement and various other HR interventions implemented help in better retention rate at industry level,” he added.  

Will the attrition rate decline? 

Indus Net Technologies said they do not have a ‘growing’ attrition rate. Instead, they have noticed a reduction in attrition percentage for the past two months. In April 2022, their attrition percentage was around 3.16; in May 2022, it was around 1.86. “We are taking a few measures to address employee attrition by offering competitive benefits and perks per the industry standard,” said Khulbe. 

She said they are focusing on appropriate leadership who can achieve goals, nurture talent, and upgrade their skills. “This way, it becomes easier to set the right expectations for the employees and maintain team spirit when things might not work as planned. This attracts talent to stay with us as they see a lot of opportunities to upgrade their skills and follow in the footsteps of their leaders to achieve career goals,” said Khulbe. 

She said that they are also focusing on different engagement methods where they can connect with the rest of the team members and promote a transparent working environment with the management. “If they face any problem, they can talk to anybody instead of silently growing dissent among them,” she added. 

At the earnings call, Samir Seksaria, the chief financial officer at Tata Consultancy Services, said that their attrition in IT services continues to rise on an LTM basis and was at 17.4 per cent. However, the company sees some stability in quarterly attrition with better hikes, improved hiring, work-life balance, and others.

Happiest Mind Technologies Director and Financial Officer Venkatraman Narayanan said there is a massive crunch in the IT industry; it is expected to peak in the next quarter before beginning to plateau. 

Bridging the demand and supply mismatch 

One of the reasons for the rising attrition include startups offering inflated salaries, which induced employees to job-shop more aggressively. But, with a funding crunch, rising inflation, and layoffs across various startups, employees are reconsidering their choices. As a result, nearly 40-50 per cent of employees are leaving startups and are getting absorbed by IT companies. 

With digitisation happening rapidly across sectors, most companies are gearing toward digital technologies, resulting in huge demand for digital talent. As per the NASSCOM report, with the IT industry growing at 11-14 per cent a year, the sector’s revenue is expected to touch USD 350 billion by FY26. 

The dearth of talent across the IT industry is inevitable. Narayanan said that there needs to be a generational shift of mindset towards employment and changing landscape between talent and recruiters, and hiring has now become a collaborative endeavour. He said while the companies need digitally capable people, they don’t have to be engineers as long as they are trained by a finishing school with new digital capabilities. 

On the supply side – there has been a significant rise in digitisation projects across industries. The rising attrition at the mid and senior level at IT companies, in a way, is bringing opportunities for freshers. TCS, Infosys, Wipro, HCL Technologies, Tech Mahindra, Accenture, Capgemini and others have added over 2.3 lakh new graduate talent in FY22. In FY23, they are looking to expand their fresher hiring programmes.

Here’s a quick overview of IT companies hiring in FY22. 

While Indian IT companies are working to the best of their ability to address the rising attrition, be it better salary hikes, flexible work, employee-friendly policies, and expanding offices to tier-II, among other benefits, they are also looking at other means to leverage technologies like AI/ML and analytics to make better decisions, and minimise the gap in their talent acquisition and retention strategy. 

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The Indian IT sector seems to be grappling with uncertainty as the fear of recession looms large. Recently, JP Morgan downgraded major Indian IT  firms from ‘neutral’ to ‘underweight’. Similarly, Nomura has also ‘downgraded’ several frontline IT companies over declining revenue.

Recession, really? 

A potential recession in the US is posing a threat to Indian IT’s growth guidance for the next FY 22-23. According to Goldman Sachs, there was a 30 percent probability that the US economy would tip into recession over the next two years because of aggressive interest rate hikes by the US federal reserve. The Deutsche Bank also warned the recession might hit the US in late 2023, largely due to the federal reserve’s steps to contain inflation.

Between 40-78 percent of revenues of Indian IT companies come from the US. Of which, TCS, Infosys, Wipro, HCL Technologies and Tech Mahindra have more than 50 percent exposure. Indian IT accounts for about 55 percent of the global IT services industry market share.

A twist in the tale

Macquarie Capital views India tier-I as an attractive territory and upgraded all the Indian IT companies in its universe to ‘outperform’.

Post-GFC, India tier-I has become a strategic partner and is not likely to be as impacted by minor cuts in IT budgets that are likely to fall first on smaller firms ( read staff augmentation providers), said Ravi Menon, the analyst at Macquarie.

Menon said even firms that did phenomenally well during the COVID-19 pandemic and are facing revenue and margin headwinds now are not expected to cut technology budgets. However, they might reduce travel costs, limit the extensions granted to highly experimental projects, and are most likely to shrink budgets by ~1 percent. 

Read: This time, it’s different for Indian IT

Making a case for Indian IT companies

“The offshoring activities will go up in the case of a recession,” Vineet Choudhary, former investment associate at Prime Venture Partners. Global tech companies will slam the brakes on ‘wasteful’ expenditures and focus on their core offerings which often leads to a step up in outsourcing as a cost-cutting measure. In other words, the Indian IT sector stands to gain.

Also, the clients or strategic partners of Indian IT companies are not your typical tech startups. Most Indian IT companies offer services to legacy businesses across sectors including banking, automobile and housing. Such businesses most likely will continue to use Indian IT services despite the recession.

Technology outsourcing is expected to grow by around 20 percent annually over the next decade as companies are stepping up digital transformation initiatives and renewing existing contracts with IT vendors. As a result, IT companies have been on a massive hiring spree.

In other words, Indian IT is less likely to be impacted by the recession. 

Previously, for the legacy IT projects, renewals were focused on maintenance, and required fewer resources to manage. However, thanks to the changing nature of digital transformation deals, the future requirements will exponentially increase deal sizes and the talent required to service them. 

“TCS and Infosys alone have over 20-25 percent of customers in the European region,” said Choudhary, stating that Indian IT has a lot of geographical diversity. 

The Indian economy is poised to grow at a double-digit rate. “Prices will go up at least at the rate of PAT (profit after tax) growth,” said Choudhary. Citing the P/E ratio of most Indian IT companies, Choudhary said the valuation would grow at 20 percent, generating good cash flows.

In addition, the depreciating rupee is working in Indian IT’s favour, as a weaker rupee should theoretically boost exports and offshore activities. 

On the bright side

IT analyst Pareek Jain said, as seen in the past – every recession is followed by a high period of growth in the Indian IT outsourcing business – be it 2000 or 2008. 

For instance, 2008 (also known as global financial meltdown) was a strong year for Indian IT companies in terms of the number of contracts; the total value and the annualised contract values exceeded that of the previous year. Government, healthcare and the manufacturing industries saw above average growth compared to other sectors. 

The worldwide IT/ITES grew by 12%, the highest among all technology related segments. Hardware spend had also grown by 4% from USD 570 billion to nearly USD 594 billion in 2008. 

Jain said that in the short term, there might be a few cutbacks in spending, which may impact a few digital projects in a few enterprises. There would be high growth in outsourcing to India in the medium term. However, because of the recession, companies will look at optimising their operations aggressively, he added.

Assumptions about what can be outsourced had changed during a pandemic when everyone was working virtually. Now, enterprises have the option to revisit those assumptions and look for outsourcing more. “There is no other region in the world which can compete with India for talent at scale at the right price points. Eastern Europe was becoming a competitor to India, but because of the current geopolitical situation, India will be preferred more,” said Jain.

Thanks to cost-saving benefits, quality of talent and government policies, India has become a hub for outsourcing. The report showed close to 80 percent of the US and European outsourcing firms prefer Indian for their outsourcing needs.

Though the Philippines, Mexico, and Ireland have emerged as strong competitors, India has still managed to come out as the top outsourcing destination. The major companies that outsource to India include Microsoft, CISCO, Amazon, Google, IBM, American Express, Dell, HP and AT&T. 

Attrition goes down

“There is another positive second-order impact in this situation. The biggest problem for IT service providers is attrition now, and almost all IT service providers claimed they would have grown higher if not for high attrition,” said Jain. 

He said the biggest reason for attrition in India is the startup boom and their crazy salaries. “They were in the race to scale faster on VC money. Now, the new funding will rationalise, and startups will be less aggressive in hiring with high salaries,” said Jain.

Jain said many startups have started laying off people and conserving cash, as advised by many VC firms. “This, along with other measures adopted by the industry, will bring down the attrition for all in the tech sector, including IT service providers,” he added. 

Roughly, 17K employees have been laid off from 71 tech companies, around the world in May since the early days of pandemic. Last month, close to 6000+ people were laidoff from various startups including Vedantu, Cars24, MFine, Meesho, and others. However, IT companies on the other hand, are on hiring spree despite the global downturn. As per report, close to 40-50 percent of employees are getting absorbed by IT companies, consulting, and product companies. 

Read: Startup’s loss is IT’s gain

The outcome

“If any business continues to have good demand and now more available supply, that business is bound to grow,” said Jain.

“Remember in the second half of FY21 when revenue declined for many service providers, but stocks started rising on high optimism. So again, there could be a dichotomy, but in the opposite direction. The revenue will rise, but stocks may come down for Indian IT service providers on bearish sentiments,” he concluded.

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Sydney-headquartered global brokerage firm Macquarie, in its latest report, said it’s different this time for the IT companies, compared to previous recessions. The firm believes the India tier-I is an attractive territory.

Macquarie has upgraded Wipro to ‘outperform’ from ‘neutral’ and said that TCS and HCL Technologies would remain their top picks. However, given the sharper correction in HCL Technologies and the improved outlook for IMS, the brokerage has changed the pecking order to HCLT>TCS>Infosys>Wipro>TechM from TCS>HCLT>Infosys> Tech Mahindra>Wipro. 

“We revised earnings across the board with updates following FY22 Q4 results and updated USD-INR assumptions at 77.6,” said Ravi Menon, an analyst at Macquarie Capital. 

This time it is different. But, why? 

“When India Tier-1 were much smaller players and acting as providers of skills and not solutions, the impact on them was more severe,” said Macquarie. 

Post-global financial crisis, India Tier-I grew to became strategic partners and are not likely to be as impacted by minor cuts in IT budgets that are likely to fall first on smaller firms that are staff augmentation providers. 

Further, Macquarie said they might also be beneficiaries of vendor consolidation deals. “We do not expect ‘knee-jerk reactions’ from any firms as the baseline expectation is that if there is a US recession, it will be mild,” said the Macquarie report. 

Macquarie believes even firms that did phenomenally well during the pandemic, and are facing revenue and margin headwinds now, are not expected to slash technology budgets. However, they might reduce travel costs, limit the extensions granted to highly experimental projects, and are likely to shrink budgets by ~1 per cent. 

JP Morgan, Nomura forecasts

The optimistic forecasting from Macquarie comes after recent downgrades of frontline IT stocks from JP Morgan. It downgraded TCS, HCL, Wipro and L&T to ‘underweight’ from ‘neutral’ and slashed its target price by 15-21 per cent over margin, revenue concerns, surging inflation, and supply chain issues in the wake of the Russia-Ukraine war. 

Here’s a quick overview of the Indian IT sector by Macquarie and JP Morgan:

Meanwhile, Japan-headquartered global brokerage firm Nomura has also downgraded several frontline IT companies, including TCS, L&T, Wipro, HCL Technology, Infosys, in the face of decline in revenue. 

Worries over demand overdone 

Macquarie said that, unlike in the 2000s, Indian Tier-I IT services firms are strategic partners and not glorified staffing providers who will be the first to bear the brunt of cuts. 

In other words, the revenue is not capped the same way as in the case of tech vendors/staffing providers. Meaning, if you are a staffing provider, you have flat fees, But, if you are a strategic partner, you get a percentage of the revenue. So, if the organisation grows, your revenue also grows.

Macquarie said BFSI is the biggest vertical for most Indian Tier-1, and demand seems resilient, citing JP Morgan that has upped CY2022 tech spending by 12.8 percent. “We think firms that choose to cut back will be risking long-term competitiveness,” said Macquarie. 

Macquarie said that technology investments are like a nuclear arms race, and where one bank leads, others must follow. 

As per Macquarie’s Asia technology team, the server demand is not slowing. It said that ‘server/networking tracker: remains positive on datacenter server growth’ as of May 2022. 

The firm’s channel checks indicate no change in demand, barring slight declines in specific segments. The company said no material changes were done to the demand environment for India Tier-I and any cost savings attempts are likely to lead to vendor consolidation, favouring larger firms. 

But how did they come to this conclusion? Typically, the brokerage goes to different users to check if the IT companies’ demand has changed. If the users (say a production or manufacturing company) say that they have stopped using them, they will reduce volume.

Macquarie said even retailers who have reported slowing sales or are warning of margin pressures continue to spend higher on CAPEX. 

For example, Target has raised its CAPEX guidance for CY22 to the higher end of its earlier guidance of USD 4-5 billion even though only 55 percent of its sales come offline now and online continues to grow faster than offline. Meanwhile, other retailers such as Macy’s are seeing improved results temporarily as customers switch to higher prices and higher-margin products such as office wear and clothes for special occasions. 

Menon said the drivers for digital transformation are linked to business strategy, and the technology changes are expected to deliver either higher revenue or lower costs or both. He said there is a strong business case to continue spending, as years of investments to stay ahead of peers can be undone by a short-sighted cost-cutting measure. 

Macquarie said the demand they saw over CY21 is not just pent-up demand but an indication of the biggest technology refresh in Enterprise technology landscapes since the adoption of  web technologies and ERP in the 2000s. 

In other words, the 2021 higher P/E and IT valuations were not because of the 2020s lows. Instead, it was due to higher adoption. Life-time-value (LTV) of SaaS and tech in a B2B setting is at least ten years, and there is no reason for the industry to worry now.

Menon said while there is some correlation between S&P 500 revenues and tech spending, people should not expect a like-to-like move as this ignores cost deflation in hardware and cost deflation in the 2000s from embracing offshore execution. 

Opportunities in the time of crisis 

Macquarie believes that just because the economy does badly doesn’t mean the recession seeps into IT. On the bright side, the demand is likely to continue for IT with digital transformation happening across industries. 

However, Macquarie said it expects minor pockets of slight spending cuts (home improvement). Citing Broadcom VMware, it anticipated additional opportunities, such as increased M&A, alongside industries bouncing back and increasing spending, particularly in travel and hospitality, energy, etc.

Impact of depreciating INR 

As per ET, the Indian Rupee has depreciated 3.5 percent against the USD in 2022. Moreover, the Rupee has depreciated by over 1.2 percent in the last few months alone. In contrast, in 2017, the Rupee stood at INR 64.60 against the dollar; today (at the time of writing), it was about INR 77.63. 

Macquarie said unlike the INR depreciation in 2014/15, INR depreciation benefits will be partly retained by vendors this time, given this is still a supply-constrained market and likely to remain so.

The brokerage said it expects attrition to be moderate, given large fresh graduate hiring in FY22 across all firms. It projects gross margins to start expanding in FY22 Q3, as FY23 fresh graduate hiring and wage hike impacts ease and utilisation improvement, and pyramid levers (i.e. fresh addition) play out. 

Is the IT sector recession-proof? 

Macquarie said the IT spending seems recession-proof, with US computer-related employment down just 0.3 percent over 2008-09 and 0.8 percent over 2009-10. For instance, the US employment in computer-related occupations has increased from 2.03 million jobs in 1997 to 3.54 million jobs in 2007, 4.56 million jobs in 2017, and 5.07 million jobs in May 2021. 

US employment in computer-related occupations excluding computer science teachers (Source: Macquarie Research)

Compared to the rest of the world, the Indian IT sector has always had higher resistance to recession and survived the 2008 financial crisis, the dot-com bubble, and the pandemic unscathed. The majority of the leading IT companies grew significantly during these critical times thanks to their strong fundamentals and surplus cash reserves. For instance, Infosys clocked 19.7 percent revenue growth during the pandemic (2021-22).

Even if the US recession hits the Indian shores, this will work in the IT sector’s favour because most of them are likely to redirect their outsourcing work/projects to countries like India, the Philippines, because of the cost benefits and tech talent available in these countries.

A study conducted by Korn Ferry showed India is projected to have a skilled labour surplus of 245 million workers by 2030. The firm said, while the world would face a tech talent crunch, India is expected to lead with over one million surplus skilled tech workers. 

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Looks like the great Indian startup party has come to a halt due to layoffs, shutdown, and funding crunch. According to market estimates in the last few months, the Indian tech startups, including a few unicorns such as Vedantu, Cars24, MFine, and Meesho – to name a few – have laid off close to 6000+ people as a measure to cut costs and extend their runway. 

But, the same is not the case with Indian IT companies as they are on a hiring spree despite the global downturn. Around 40-50 per cent of employees leaving startups are getting absorbed by IT companies, consulting and product companies and global captive centres (GCCs). 

IT, GCCs to the rescue 

The Indian IT companies are expected to hire close to 3.6 lakh freshers in FY22, as per cognitive intelligence platform UnearthInsight. For instance, IT giants Infosys and TCS recruited about 1.9 lakh freshers in the fiscal year 2022, indicating that the IT sector will continue to be on top of the game this financial year. 

Here’s a quick look at the total headcount of employees across IT companies, alongside the number of jobs added in FY22 Q4. 

India has about 1,500 GCCs across sectors. This includes banking, financial services, BFSI, automotive, IT software, etc. As per an estimate based on hiring plans of existing and upcoming GCCs, the Indian-based captive centres of MNCs are set to increase employee count by 1.8-2 lakh by the end of this fiscal year. By 2025, 500 new GCCs are expected to set up their captive tech, and the total headcount is set to double to 3-3.2 million in the next three years, as reported by ET. 

Further, the report stated that in the last one year, the cohort of companies together added about 1.7 lakh jobs in India, while gross hiring stood at 3.5 lakh. 

The rise of captive centres can be attributed to the cost advantages and huge talent pool that the country has – particularly in technology – making India a strategic hotspot for multinational corporations (MNCs). 

Are IT jobs stable? 

The increasing headcount of the majority of these IT indicates a steady growth in team size. That is because most companies are offering great incentives, promotions, stability and job security for their employees. 

For instance, in the case of TCS, the company believes that its focus on investing in people and its progressive workplace policies have helped them retain and hire more talent. HCL Technologies said that it had paid out a special milestone bonus to all of its employees in the March quarter of last year – i.e. close to USD 100 million – to be precise, USD 99.8 million. Of course, not to forget the Mercedes-Benz cars as a reward to top performers. 

Many employees said they would rather move to a stable organisation even if they look at a pay cut.

But, at the same time, it is not that startups are not stable. Recently, various unicorns and pre-IPO startups have been hiring and growing their teams. Unfortunately, some of these companies have triggered negative sentiments among job seekers because of the layoffs. However, many experts believe that this will be corrected with time. 

Oh, the ‘Great Resignation’

Meanwhile, the Indian IT sector has also succumbed to increasing attrition. Shortage of digital talent, alongside high demand for qualified professionals, and increased wages, has led to increased attrition. 

As shown below, Cognizant has the highest attrition rate, followed by Infosys, Tech Mahindra, Wipro and others. However, the majority of the companies have reported some stability in quarterly attrition with better compensation and hikes, improved hiring, work-life balance, and others. 

But, the question is, what are these numbers telling us? Credence Wealth Advisors’ founder Kirtan A Shah said that the attrition leads to reducing margins for the IT companies. In other words, companies have to increase salaries to retain or hire new talent. Also, the utilisation falls. For instance, in FY22 Q4, Infosys’ utilisation dropped from 88.5 per cent to 87 per cent. 

Where is the talent heading? 

The founder and CEO of Han Digital, Saran Balasundaram, told The Economic Times that the demand is across various roles, including full-stack engineers, data engineering, product management, DevOps, etc. Currently, the overall headcount of the IT industry stands at 5.1 million, out of which 4.2 lakh people are employed with startups – almost 20 per cent of this workforce left startups to join the IT industry in the last few years, he added.  

As Shah pointed out, in the last two years, a lot of new-age tech startups were offering 2-3x salaries, ESOPs, etc., attracting talent from the old IT services companies. 

Now, it looks like they are returning to the IT world. 

“Startups’ may be ditched for stability,” said Shah. He said, along with a depreciating rupee, this can probably improve the operating margins for the IT sector going forward.

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Earlier this week, the global brokerage firm JP Morgan ‘downgraded’ the Indian information technology (IT) sector over margin and revenue concerns, alongside surging inflation and supply chain issues in the Russia-Ukraine tussle. 

The global brokerage firm has downgraded Tata Consultancy Services, HCL Technology, Wipro, and L&T Technology to ‘underweight’ from ‘neutral’ and slashed its target price by 15-21 per cent, but maintained an ‘overweight’ rating on Infosys, Mphasis, and Tech Mahindra, with reduced target prices. 

Why, though?

The firm said that the Indian IT growth was accelerating till the third quarter of 2022 and has begun to slow down from the fourth quarter, which is likely to worsen into FY23 due to the high attrition rate and talent management that has pushed up costs of hiring and retaining employees. 

JP Morgan’s Ankur Rudra and Bhavik Mehta said that the rising margin headwinds in the near term and revenue headwinds in the medium term from potential macro slowdown would mean that the sector’s earnings upgrade cycle is behind. 

Goldman Sachs also warned that there was a 30 per cent chance the US economy would tip into recession over the next two years due to aggressive interest rate hikes by the US federal reserve. Other firms such as Wells Fargo and Morgan Stanley believe a recession in the US is around the corner as the US Fed shows no signs of easing its fight against high inflation. 

Meanwhile, Kotak Equities said ‘what is priced into stock’ is a risk to margins. What is not priced in is ‘economic recession.’

The company has trimmed its fair value targets for nine IT stocks under its coverage by 2-14 per cent, assuming a moderate slowdown in demand for IT services. 

S&P Global rating slashed India’s growth forecast to 7.3 per cent from 7.8 per cent for FY23 on rising inflationary pressure and the prolonged Russia-Ukraine war.

Wait, a twist 

Interestingly, the US market contributes 40-78 per cent of revenues for Indian IT companies. This includes TCS, Wipro, HCL Technologies, Infosys, and Tech Mahindra, having more than 50 per cent exposure. 

On the bright side, this can also be a blessing in disguise for Indian IT companies, as the majority of them are likely to cut costs abroad and outsource work to countries like India, the Philippines and others because of the cost benefits/advantage. In addition, some experts said that thanks to the recession and rising inflation, companies can now focus on offering better services to their customers, as the innovations and other R&D related work takes a backseat. 

Is the Indian IT sector recession-proof? 

The Indian IT sector has always had higher resistance than the rest of the world. This includes the 2008 financial crisis, the dot-com bubble, the pandemic, and others. Moreover, the fundamentals of some of these IT companies are at an all-time high. 

Here’s a quick overview of the top IT firms in India, showcasing the P/E ratio and sales growth in the last five years. 

Kiran Kumar S said during 2021-22, Infosys clocked 19.7 per cent revenue growth – it is the fastest in 11 years. “Many more companies performed very well, the same way,” he added, saying that the Indian IT industry saved the economy during a Covid downturn. 

If not the IT sector, then what are the alternatives?  

While JP Morgan has ‘downgraded’ the Indian sector to ‘underweight’ and slashed the target price of multiples by 10-20 per cent, the question is, which are the alternate sectors that are bound to generate revenues amid the recession? 

The JP Morgan report stated the bottom-up outlook remains positive from most services, software, and SaaS names YTD. The tech spending cycle remains buoyant structurally. “We feel there are more downside risks to current earnings assumptions,” it added. 

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Global IT company Wipro has announced the appointment of Satya Easwaran as the Country Head for India. In his previous role, Easwaran served as the Head of Business Consulting, India (Telecom, Media & Technology sector lead) at KPMG.

As the Country Head, Easwaran will be in charge of strengthening the company’s business in key sectors through strategic consulting, transformation and modernisation. In particular, he will be responsible for assisting clients in leveraging the company’s capabilities in cloud, engineering, data analytics, digital, and cybersecurity for their business and digital transformation initiatives. “I am honoured to be a part of Wipro and lead this strategic geography. India is experiencing significant technology-led shifts and growing demand for specialized skills and innovation – all of which present us with exciting opportunities to strengthen our partnerships with clients and deliver value to our ecosystem. I look forward to contributing towards Wipro’s leadership in the India market,” said Easwaran. He holds an electronics engineering degree from Mumbai University and an MBA in finance and international business from Santa Clara University. During his previous stints at KPMG and Accenture, Easwaran held multiple leadership positions with a focus on Software-as-a-Service (SaaS), cloud, digital, strategy and transformation.

Commenting on Easwaran’s appointment, Anis Chenchah, CEO of APMEA (Asia Pacific, India, Middle East and Africa) and member of the Wipro Executive Board said that the former’s experience in delivering high-value consulting services and building successful sales and leadership teams will strengthen Wipro’s position in the Indian market.

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Wipro Limited has appointed Anis Chenchah as a member of the Wipro Executive Board and Chief Executive Officer, APMEA (Asia Pacific, India, Middle East and Africa). “I admire Wipro’s purpose and its extraordinary commitment to social good and am impressed by the effectiveness of its transformation over the past 2 years. It is a privilege to lead Wipro’s business in a region that I am deeply passionate about, and to partner with our clients as they accelerate their business and digital transformation,” he said.

Anis has over two decades of experience in consulting, IT and business process services. He was the Global CEO of Capgemini Business Services and a member of the Group Executive Committee. Prior to that, Anis held various leadership roles in Capgemini Financial Services across Europe and the Middle East.

“I warmly welcome Anis to Wipro. His appointment is a bold indication of our ambition for exponential growth and leadership in APMEA as we tap into its promising future. With his successful track record of driving high growth in diverse contexts, managing complex transformations and building high-performance teams, Anis is well-positioned to accelerate our success in this strategic market,” said Thierry Delaporte, CEO & Managing Director, Wipro.

Anis holds a master’s degree in Engineering from ENSISA in France.

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In a major relief for IT giants like Wipro, Infosys, TCS and Tech Mahindra, India and Australia signed a treaty that discontinues taxing on the offshore income of Indian firms providing technical services in the island country.

India and Australia, on April 2, 2022, signed an Economic Cooperation and Trade Agreement (ECTA) wherein Canberra has agreed to amend their domestic laws, an anomaly in the Double Taxation Avoidance Treaty (DTAA), 1991 between the two countries and enable Indian IT and ITeS players to scale up their operations in Australia. The anomaly had a huge burden on the Indian IT companies of paying taxes close to about $1.3 billion since 2012.

The Australian government was taxing under the provisions of the Double Taxation Avoidance Agreement, under the royalty head from Indian IT companies for offshore work done in India and these companies had to pay tax in India for the same income. This led to losses of almost $1 billion for the $220 billion IT industry over the last ten years.

The treaty signed doubles the bilateral trade for the next five years which is from $27 billion to $45-$50 billion. The treaty has also eased the norms for collaboration and talent sharing between the two nations.

Reacting to the treaty signed, which has given a breather to the IT industry, Wipro chairman Rishad Premji tweeted thanking the Indian government, he tweeted, “Thank you so much to the Government of India and Nasscom for resolving the critical and long-standing Australia tax issue. The perseverance paid off!” 

Nasscom President Debjani Ghosh also tweeted, “High skilled talent mobility is the most critical success and imperative to a thriving global digital economy. Super stoked and proud to see both India and Australia lead is the way!. Kudos @narendramodi @PMOIndia @PiyushGoyal for setting the tone for the world! 

@nasscom“

According to the IT industry body estimates, the Indian IT sector’s annual revenue from the Australian market is about $2-$3 billion. Of the total revenue, about 50 percent of this business is estimated through services that are offshoring to India. The impact of tax on the offshore services income was levied at 15 percent which is about $225 million annually which is around Rs 1,507 crore.

From the financial 2011-12 to date, the cumulative impact has been estimated at over $1 billion for India. In a statement, Nasscom said, “In addition, the recognition of talent mobility with the four-year temporary work permits, the spouses and dependent visas will help enterprises in both countries to leverage the digital talent skills, to build digital capabilities at scale and to collaborate through innovative startups”.

Tech Mahindra had lost an appeal against the tax levy in an Australian court way back in 2018. “Australia has now agreed to amend its domestic taxation law to discontinue taxation of offshore income of Indian firms which are providing technical services to the country”, Piyush Goyal, Union Minister for Commerce and Industry, had said.

The Union Minister Piyush Goyal also tweeted, “Austrailer for a bigger show. #IndAusECTA is a harbinger of more to come. Read my write-up in @EconomicTimes where I explain how India’s earnest desire & industry confidence are reflected in the two recently sealed trade deals.

Prabhakar KS, founder and chief executive of Shree Tax Chambers, also tweeted, “Finally, Much awaited..!! India – Australia Economic Cooperation & Trade Agreement (IndAUS – ECTA) Signed on 02.04.2022. Wherein Canberra has agreed to amend its domestic tax law to stop the taxation of offshore income of Indian firms providing Technical services in Australia. In other words, a great relief for TCS, Wipro, Infosys, etc… Thank you @PiyushGoyal @DanTehanWannon  MP

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