The new economy has scored another key victory over brick and mortar. Wipro, the $1 billion software services major, has overtaken Tata Steel to become the top private sector employer in the country. The steelmaker held the stop slot till the last financial year.
On December 31, 2004, Wipro had an employee base of 44,054 while Tata Consultancy Services, the largest software service provider in Asia, was a close second, with an employee strength of 43,681 during the same period.
Of the top five private sector employers in the country, three are from the Tata group, with Tata Motors making the cut at number five just below Infosys at number four.
It is not surprising that Wipro and TCS are recruiting the numbers they are. The software services industry is manpower intensive. Wipro also has one of the biggest BPO operations in the country after its acquisition of Spectramind, which has close to 15,000 employees.
That apart, Wipro as a company has diversified interests. It has four distinct divisions: IT hardware, software, FMCG and fluid power. Its software services division Wipro Technologies accounts for 39,337 employees, the hardware division, Wipro Infotech, has 2,407 employees, Wipro Fluid Power employs 614 and Wipro Consumer Care and Lighting another 1,696.
TCS has in the last three quarters added around 7,000 employees and its chief executive officer, S Ramadorai, had recently announced at the World Economic Forum in Davos that it would add another 7,000 employees in 2004-05.
Wipro, on the other hand, has never given out recruitment projections so it is not known how many people the Bangalore-based company will end up hiring in the next financial year.
Meanwhile, the Tata Steel brass is not mourning its lost status. In fact, it could well be celebrating, as the company has been downsizing a bloated workforce over the past decade.
"Ten years ago we did not know how many employees we had. I guess, around 80,000. At that time the talk was Tata Steel did not employ villagers but entire villages," said Niroop Mahanty, the company's vice-president, human resources management.
Mahanty also said it was unfair to compare companies in two distinctly different industries. "One is human capital intensive, while the steel industry is slowly reducing its dependence on employees because of the technological advances in production of steel," he pointed out.
A point echoed by S Padmanabhan, executive vice-president, TCS. "TCS and Tata Steel are intrinsically two different companies and hence any comparison in terms of the number of people we employ will not be fair."
Still, the fact that IT companies are beating traditional manufacturing companies in employment generation is a clear signal that the knowledge-based economy is taking its rightful place in the growing economy.