Corporate India's big six boost profits, struggle with flat job growth

India's top six corporate firms saw their employee headcount growth stagnate at -0.2 per cent, with numbers dropping from 1.74 million in FY23 to 1.73 million in FY24

India’s top six corporate groups are nearing a major milestone, approaching a market capitalisation of Rs 100 trillion. These groups have demonstrated steady growth in key performance indicators, with revenues increasing by 7.3 per cent, profits rising by 22.3 per cent, and market capitalisation soaring by 43.8 per cent in FY24.

However, their employee headcount growth remains stagnant at -0.2 per cent. In FY23, these six groups, comprising 69 listed companies, employed 1.74 million people, a slight decrease to 1.73 million in FY24, according to data from annual reports, Capitaline and Bloomberg, as mentioned by Financial Express.

Among these groups, the Tata Group, with 23 listed companies, remains the largest employer, with 824,000 employees, though their headcount growth is flat. The Reliance Group saw an increase of 48,000 employees in FY23 (bringing the total to 412,000), but this number dropped by 44,000 in FY24 (to 367,000). The Adani Group, consisting of 11 listed companies, added only 1,047 employees in FY24, the report said.

Notably, the Adani Group’s employee figures are striking. With a total workforce of just 36,000, it has the smallest employee count among the top six groups, while the others each employ at least 150,000 people. As the third-largest group by market capitalisation, the Adani Group boasts revenue of Rs 3.09 trillion, profits of Rs 41,263 crore, and a market capitalisation exceeding Rs 16 trillion.

The Bajaj Group has experienced a 26 per cent increase in headcount, primarily due to hiring at Bajaj Finance. However, Bajaj Auto has seen a steady decline from 7,317 employees in FY22 to 6,192 in FY24. Among the other two groups, the Birla Group increased its workforce in FY24, while the Mahindra Group’s headcount decreased by 2.2 per cent, largely due to Tech Mahindra reducing its staff by nearly 7,000.

Beyond the top six groups, a Bank of Baroda study involving 1,196 companies found that employment growth was a modest 1.5 per cent in FY24, down from 5.7 per cent in FY23. In absolute terms, the number of employees across these companies grew by 90,840 in FY24, reaching 6.25 million, compared to an increase of about 333,000 employees in FY23, totalling 6.16 million, the report said.

Reasons for workforce reduction

The report highlighted that companies appeared to be turning to downsizing for various reasons. Sectors such as IT, textiles, power, electricals, hospitality, and business services all experienced a reduction in their total workforce.

Moreover, the rapid integration of artificial intelligence (AI) and automation, accelerated by the pandemic, has led to the reduction of some positions. Various businesses are shifting to more streamlined operational models by outsourcing non-essential tasks to staffing agencies. This aligns with Mukesh Ambani, head of Reliance, who has linked the reduction in its workforce to the adoption of innovative employment strategies, the report stated.