Here’s why automation, AI is good for IT companies and bad news for you

Ten years back, Indian IT companies used to hire at least four lakh people and now in the present day and age, the numbers have dropped to two lakh.

As per the Nasscom data, 31,846 engineers were required to generate $1 billion of export revenue in 2009-10 but in 2015-16, only 16,055 engineers were required to clock the same revenue.

This slowdown in hiring and increase in productivity is attributed to automation.

Automation, Artificial Intelligence, data sciences, etc is improving productivity since seven years now and has lowered down the hiring rate.

"What you're seeing now is about 200,000 people being hired in the IT industry -- it's not the 4-5 lakhs that they used to hire 10 years ago. And that's because the growth has shrunk from 35-40% and the competition was for resources. Even now the competition is for resources, but it's for slightly more experienced resources -- people who can work on automation, artificial intelligence, machine languages, data sciences. So, it's not hiring for Java coding anymore," Infosys co-founder Kris Gopalakrishnan had told ET.

Infosys CEO Vishal Sikka had said that the rate of hiring will rise but not like earlier times as the number of people per value delivered will continue to come down.

“This is the point of revenue per employee -- it happens in every industry. It has to happen in our industry as well. It is already happening," said Sikka.

Not that long ago, India became a hub of IT sector.

Companies such as Infosys, TCS, Cognizant, etc gave engineers dreams of working at plush offices.

"In the past we looked at arbitrage, we looked at headcount, it was more like "you're told and we will do" versus looking at customer outcomes. Headcount is no longer a discussion - so I think it's more about customer-centric outcomes," Pankaj Phatarphod, managing director at RBS, which currently outsources IT to companies such as Infosys, told ET.

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