French IT consulting firm Capgemini will be slowing down on hiring going forward due to slowing growth as well as reduced attrition levels, the company’s Chief Executive Officer Aiman Ezzat said in a call with analysts following the company’s results announcement for Q3. Capgemini follows the calendar year.
Capgemini has a significant number of employees in India, with over a lakh-and-a-half employees in the country. It doesn’t disclose a geographical breakdown of its employees each quarter.
The company announced its results for the third quarter on October 27, and said that they demand decelerating in the coming quarters. The CEO said that 2023 will be a year of growth, even if not as strong as 2022.
The company’s net addition for the September quarter was 6,300 employees, down from 11,400 the previous quarter. Capgemini’s total headcount was 3,58,400 as of September 2022.
Aiman Ezzat’s comments on hiring during the company's call with analysts come as Capgemini’s Indian counterparts too have reduced hiring after the pandemic-fuelled demand led to a war for talent. Net employee addition by TCS, Infosys, Wipro, and HCLTech was down 45 percent in the quarter ending September as compared to the preceding quarter.
Ezzat said that since they are not going to grow as much, it is normal to hire fewer people. The second factor he cited was that attrition is now moderating.
Capgemini’s attrition in Q3 was at 26.8 percent, down from 27 percent last quarter and 26.2 percent in Q1. In the year-ago period, attrition stood at 19.5 percent.
“We expect attrition to moderate further going forward as the demand environment and talent market are normalising progressively,” CFO Carole Ferrand had said
For India, Ezzat said that based on the resignations they saw in Q3, attrition in India in Q4 is coming down quite a bit. “We don't need to hire as much,” he said.
While the attrition is still “too high”, it’s a significant reduction from what the company has seen, he said.
The CEO said that they do not need to “over hire” and can start looking at some operational optimisation in utilisation and other areas.
“It’s an opportunity to tighten operationally…Most people [counterparts in the industry] have reduced significantly the hiring now because of the expected somewhat lower growth and of course reduced attrition,” Ezzat said.
When it comes to resources, he added that he sees less tension on resources in Q4 and Q1 2023 in terms of volume.
“I can tell you see plenty of tension in terms of finding the architects on cloud or finding a great data scientist, finding people with strong industry expertise…,” he said.
Ezzat’s comments over a deceleration of demand and slowed hiring also come at a time when there is a fear of macroeconomic concerns and the economic slowdown impact tech budgets of clients.
The company’s revenue for the quarter was 5.55 billion euros, up 15.7 percent from the year-ago period in constant currency.
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