IBM at number one, Accenture 3rd, in employee strength.
By American Bazaar Staff
So what is the criteria for being the best IT company in the world? Is it having the financial ability to have the most number of employees on its payroll, or to earn the most revenue, per employee? International Business Machines Corporation (IBM) ranks number one in both, but Tata Consultancy Services Ltd (TCS), India’s largest software firm, has overtaken Accenture Plc to become the world’s second biggest IT services employer, with nearly 264,000 people on its payroll.
When it comes to the revenue, however, TCS has a long way to go. Its revenue is less than half of the Dublin-based technology and consulting firm, Accenture.
According to the Accenture website, its revenue for fiscal 2012 — (12 months ended August 31, 2012 — was $27.9 billion.
IBM, which does not disclose the number of employees by businesses that include computer hardware and software licenses, employs nearly 300,000 people in its services division, reported Live Mint, gathering data through at least two executives, who spoke on condition of anonymity. Accenture, which announced its second-quarter earnings on March 28th, said it had about 261,000 staff worldwide.
However, Accenture and IBM are way ahead of TCS on another important parameter—revenue productivity. For instance, while TCS’s revenue per employee is around $46,000, it’s $197,000 for IBM and about $107,000 for Accenture. This is because while Accenture sells more high-end consulting services as part of its offerings, IBM earns more by bundling different hardware and software solutions as part of large deals, the paper reporter.
Global annual revenue for Accenture, the world’s second largest technology and consulting firm by sales, stands at $28 billion—more than twice what TCS generates. From its global technology and business services divisions, IBM generated about $59 billion in 2012.
An IBM spokesperson said the company employs more than 400,000 employees globally. The spokesperson declined to disclose the number of employees in their IT services business.
At the end of their December quarter, overall headcount at TCS stood at 263,637—well ahead of Infosys Ltd, Cognizant and Wipro Ltd. While Infosys and Cognizant had more than 150,000 employees at the end of their last quarter, Wipro’s IT services business accounted for 142,905 employees. Capgemini employs about 125,000 people worldwide.
The gap widens considerably when the quarterly numbers are taken into account. For the December quarter, TCS added 17,000 to its total headcount—more than Infosys, Cognizant and Wipro put together for that period.
Experts also feel that employee additions at TCS will not affect their margins in the near term as the company gets close to having almost half a million employees on its rolls.
Salary cost as a percentage of total revenue for TCS currently stands at about 50-55%, while for the industry it is closer to 60%, according to an analyst at a foreign brokerage who did not want to be named.