In November 2023, L&T Technology Services (LTTS) reportedly laid off 200 mid to senior-level employees, citing reasons like "reducing overlapping roles." This workforce pruning came within a month of the tech company revising its revenue growth forecast for the ongoing fiscal year.
In September, the company reported a 5 per cent rise, achieving a net profit of Rs 315.4 crore. Many estimated that this meant another round of layoffs were in the offing.
Amit Chadha, Chief Executive Officer and Managing Director at LTTS, claims things are not as simplistic as this. "The reality is that hiring an employee is very tough, but parting ways is tougher. We parted ways with a few individuals (200) recently, and it is based purely on the performance-based system that we do every year, which is no different from any other year," he explained.
In 2022, Alphabet laid off around 12,000 employees or 6 per cent of jobs in 2022, making it the biggest-ever downsizing in its history. In March, Meta claimed it would trim its workforce by 10,000 more workers and incur restructuring costs ranging from $3 billion to $5 billion after cutting 11,000 jobs a year ago.
In March, Amazon implemented a workforce reduction of an additional 9,000 positions, resulting in a cumulative total of 27,000 job layoffs. By March 31, Microsoft had terminated 10,000 employees in anticipation of a deceleration in revenue growth.
In response to the diminishing demand for personal computers, Dell declared its intention to lay off about 6,650 workers, impacting approximately 5 per cent of the company's global workforce. IT firm Accenture made headlines with its decision to cut 19,000 jobs, while IBM implemented layoffs affecting 3,900 employees.
While these sparked speculations that layoffs will become a mainstay in the tech sector, Chadha said that LTTS is eager to hire people in select roles. "I am happy to hire over 700 plant engineering people in Baroda and Chennai, where LTTS has a massive order backlog. Similarly, we need people for software-defined vehicles, digital products and digital manufacturing," he stated.
The company made approximately 2000 conditional annual offers to hire freshers from educational institutions for the last three years. Its Global Engineering Academy (GEA) will continue to train these youngsters.
"We have stood these job offers, putting the incumbents through a program where they have to study and pass a test, where if they do, they come on board LTTS. 176 people are left where we must honour our commitment, which we will do this quarter," he added.
LTTS is still working through details for the 1000 offers it will make for the following year. Moreover, the GEA continues spending money on upscaling people, skilling people, etc.
During COVID-19, LTTS ran two initiatives—'Bounce Back' focused on creating customer proposals and initiating socialising amongst those working remotely. At the same time, 'Resilience' was a Y analysis of its existing cost structures. These exercises helped augment its revenues and bring down its cost structure, where it went from being a 16% EBITA to 18.9 per cent in about four quarters.
LTTS has once again initiated a similar exercise to super-grow its top accounts, looking at its cost basis to see what is required and what can be expended. Chadha is confident that this will help it become more resilient. "For example, at 15,000 people, 80 per cent utilisation is different. 20 per cent has different cost repercussions for our current 24,000 workforce," Chadha explained.
This year, LTTS will focus on six areas—software-defined vehicles, Gen AI, digital products, digital manufacturing, next-gen communication and sustainability. Chadha maintains that as the largest India-headquartered pureplay engineering services and technology services company, one of the
top four tech companies globally in terms of revenues, the company aims to get to $2 billion.
The company is also leveraging technologies like generative AI (gen AI) to help it achieve these goals. In 2009, around 70% of its work was mechanical with 10% focused on manufacturing and another 20% on embedded work. Today, 65% of its work is digital, 15% is plant-related and 20% is traditional engineering. "Had we not invested in the right time to skill upscale and find new areas, we would have been dead as a business," Chadha stated.
Change is the only constant in the tech industry, where all players are bound by their commitments to clients who are intent on automation. Those organisations that continue to invest in technology augmentation are the ones that will do well, while those that drag their feet will encounter problems. History has proven this again and again.
Eager to stay on the right side of tech evangelisation, LTTS invests 2% of its annual revenues in reusable tech assets and solutions. Every year, it would file 25 patents for itself and 25 for its customers. In the past ten quarters, LTTS filed 25 patterns for itself and 25 for its customers every quarter. It underpins how it has grown 4X in terms of technology by democratising tech skills across the board.