Infosys headcount shrinks by 6,940 in Q1FY24, employee count declines for second consecutive quarter

Infosys’ net addition fell steeply in each quarter of the last fiscal year.

IT major Infosys ended the first quarter of FY24 with 6,940 fewer employees, making this the second consecutive quarter the company’s headcount has shrunk. With this, the company’s headcount stands at 3,36,294. HCLTech and Wipro also saw their headcounts fall sequentially this quarter.

TCS added 523 employees on a net basis to its headcount, while HCLTech’s employee count shrunk by 2,506 and crosstown rival Wipro’s by 8,812.

Talent market cooling off

Hiring is an indicator of demand and as demand has fallen, companies across the industry look to utilise the bench strength they have built and increase utilisation, rather than hiring ahead of time.

Hiring numbers were not expected to be significant across companies. In Infosys’ case, net addition fell steeply in each quarter of the last fiscal year. The company added 21,171 employees on a net basis in Q1FY23, 10,032 in Q2, and 1,627 in Q3, before going into the red in Q4.

Attrition for the quarter continued its downward trend and came in at 17.3 percent, from last quarter’s 20.9 percent on a trailing-twelve-month basis. As the talent market cools off, attrition rates have continued to normalise further.

The company did not share any hiring plans, particularly in terms of freshers, for FY24. "As freshers start getting deployed, we will calibrate the hiring for FY24 based on the available pool of employees, growth expectations and attrition trends," Chief Financial Officer Nilanjan Roy told analysts last quarter.

The financials

The company’s utilisation also declined to 80 percent in Q4FY23, something it hoped would improve in subsequent quarters. In Q1, utilisation stood at 81.1 percent, excluding trainees.

While the company’s revenue was slightly better than estimated on a constant currency basis, the company’s guidance being slashed to 1-3.5 percent from 4-7 percent previously does not bode well.