Despite rising revenues, IT major Tech Mahindra is set to reduce its business process services (BPS) headcount by 5,000 to 38,000 in FY 2020-21, as a larger part of the tasks get completed through automation and artificial intelligence.

Tech Mahindra’s net profit rose 14.3% to Rs 1,309.8 crore in the quarter ended December 31, while revenue was flat at Rs 9,647 crore. Dollar revenue was down 3.3% at about $1.31 billion.

Meanwhile, Tech Mahindra had reported a reduction of nearly 2,500 people in its overall headcount in the December quarter and attributed a bulk of the job losses to the BPS vertical.

Company executives said there is a "non-linearity" between revenue growth and overall headcount as technology makes it possible for a single individual to accomplish multiple tasks.

"What has happened is I used to have around 43,000 employees at the end of FY20, at the end of FY21, I expect about 38,000 employees in BPS. But that is because the productivity has increased and the revenue has also gone up," C P Gurnani told PTI.

He added that the same trend of reducing staff may not continue in the forthcoming period and the headcount may stabilize, even as the revenues continue to grow. 

Gurnani further said each one is looking at better productivity and efficiency at present and stressed that the productivity of each employee has increased. He said each of the employees accomplishes more tasks at present and is assisted by a chatbot which is developed in-house.

As companies continue to invest in automation, analytics, and artificial intelligence that have become very critical for a customer's operation, it is evident that there will be a non-linearity between revenue growth and headcount. Hence it becomes important for organizations to continue reskilling and upskilling their employees-something the company intends to double down on as it has identified 190 key skills for which it will look to hire experts as well as upskill employees.