Techie News : HCL Technologies to replace employees doing simple software testing with domain experienced staff

BENGALURU: HCL Technologies expects a drastic change in its employee structure over the next couple of years as automation, artificial intelligence (AI) and other disruptive technologies increasingly make low-level engineers doing repetitive manual tasks redundant.

The country’s fourth-largest software exporter, which employs over 95,000 engineers, believes it will have an “hour glass structure” with more engineers with “domain work experience”, replacing the current “pyramid structure” where a lot of employees do simple software testing and provide information technology support.

“The volume of work which is being done at the lowest layer of pyramid is getting automated,” said C Vijayakumar, corporate vice-president for infrastructure services delivery at HCL Technologies. “People acquiring new skills in new technology areas are the future. So, there will be flattening of the pyramid,” he told ET in an interview last month. That means the Noida-based software major will eventually have more engineers with niche skills instead of its current army of engineers for information technology support.

Just a few months ago, ET had reported that Wipro, the country’s third-largest software exporter, is working on a similar model and has started a three-year exercise to become a lean and agile company.

Wipro, which employs over 150,000 employees, aims to slim down by about a third without resorting to mass layoffs, four executives familiar with the development had told ET. The Bengaluru-based firm had declined to comment.

HCL Technologies’ acknowledgement to a structural transformation is a pointer to how artificial intelligence and automation impact the way large software exporters offer IT support to their clients.

Some analysts say more Indian firms talking AI and automation suggests that adoption of these technologies is starting to mature and that its impact will be “hugely disruptive”. “Suffice it to say this will be an uneven process,” said Thomas Reuner, principal analyst at Ovum, a London-based IT research firm. “The consensus appears to be that automation and AI will be leveraged to reduce FTEs (or, full time equivalents that indicates the workload of a full-time employee during a fixed time) for lower value activities and the focus will shift toward hiring for higher value tasks.” Analysts say it’s important for these big companies to lead well-rounded “discussions on how these technologies will impact governance, testing and most importantly hiring”.

To be sure, HCL Technologies, with revenues of $5.37 billion and Wipro making more investments in building IP-led automation platforms, puts the spotlight on companies looking to increase their “nonlinear revenues” or generating more business without correspondingly increasing headcount.

“We are seeing early trends which makes it certain that in the future we (will) need more people with domain experience,” said an executive at HCL Technologies, who requested not to be identified. “It is difficult to say what we will be like in three or five years (headcount wise). But certainly, we won’t be this big,” the person said.

A spokesman for the company declined to comment as HCL Technologies is in quiet period before it declares its third-quarter numbers at the end of the month.

For over a decade now, the IT industry, which employs more than three million people in the country, has been a driving force for creating jobs in the formal economy.

While the pace of hiring by these big companies is slowing, new opportunities are also opening up in the form of jobs at startups. However, there seems to be a division among the big four IT companies.

The top two, TCS and Infosys, which together employs more than 460,000 people, have maintained that they don’t expect automation and AI to replace any jobs.

Wipro and HCL, which together have over 250,000 employees, on the contrary, seem to be early movers in trying to cope with structural changes in the technology business.

At HCL Technologies, early signs do suggest that the company is already cutting excess flab in areas where experts believe more work is being taken over by machines.

In the year ended September 2014, the company increased the headcount in its support function by less than 5% to 8,493 from 8,091 a year earlier, while the number of people in technical functions increased over 10% to 87,029 from 79,105 during the same period.

Courtesy : Economic Times , Jan 23 , 2015

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