IT firms TCS, Infosys, Wipro to reduce subcontractors to control costs

BENGALURU| MUMBAI: Indian IT services companies may reduce dependence on subcontractors to control costs, as the Covid-19 pandemic threatens to slow new deal flow and pressure margins.

Tata Consultancy ServicesNSE 4.49 % (TCS), InfosysNSE 5.46 %, WiproNSE 3.68 % and Mindtree said subcontracting costs are expected to fall in the coming months. On average, subcontracting forms about 10-15% of total employee cost.

In the last few years, subcontracting costs had spiked as IT firms looked beyond in-house talent for new-age technical skills.

“We will be reducing dependency on contractors to some extent to optimize it (cost). Lateral hiring will be done for specific skills in a limited manner and we also continue to build talent within the organisation,” Milind Lakkad, Global Head, Human Resources at TCS, told ET.