International Hr Issues

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You are here: ET Home » Tech » ITeS 24 SEP, 2012, 06.53AM IST, INDU NANDAKUMAR,ET BUREAU

Idle staff in US, Europe to drag profits of Indian software companies like TCS, Infosys and Wipro
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BANGALORE: The rising number of idle workers in the US and Europe for Indian software companies could drag profitability lower. This will add to troubles already caused by an uncertain business environment, where clients are delaying decisions around technology projects. The so-called 'bench' consisting of engineers who are not working on any active projects has increased by at least seven percentage points at TCS, Infosys BSE -0.31 % and Wipro, analysts said. Industry executives and analysts are of the view that the swelling bench could shave off up to 150 basis points from operating margins in the coming quarters. Onsite utilisation rates, or the proportion of engineers in client locations assigned to billable projects, have fallen to below 90 per cent from 97 per cent at the beginning of the year. A senior industry executive, who works closely with large IT companies, said that up to 18 per cent of onsite staff are sitting idle at some firms. Also Read Grocers queue up for slice of Kishore Biyani's empire Oberoi Chairman to diversify the 78 yr old brand Economic reforms, global liquidity to keep stock mkt on a high "Onsite bench size has swollen across large IT firms," said Hitesh Shah, director of equity research at Mumbai-based brokerage IDFC Securities. "With every contract won, companies hired more local staff, but they…...

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