Wipro will go slow on hiring and defer on-boarding in FY21 due to the novel coronavirus, or COVID-19, pandemic. The company went slow on on-boarding in Q4 FY20 as well, resulting in decline in its headcount by 4,500.
Total number of employees in Q4 FY20 stood at 182,886 as opposed to 187,318 for the quarter-ended December.
Saurabh Govil, Chief Human Resources Officer, Wipro, attributed the net reduction to the company utilising its existing resources and going slow on hiring in Q4.
This, he said, resulted in higher utilisation rates. The company’s utilisation rate stood at 73.4 percent in March quarter as opposed to 70.2 percent in the Q3. The management's focus right now would be to how to utilise its current staff and manage the situation.
Govil did not disclose how much the company hired or on-boarded in Q4 and its plans going forward.
The company had doubled its hiring in FY20. According to reports, the company had hired 12,000 freshers last fiscal and was planning to hire similar numbers in FY21. However, COVID-19 is likely to put a halt to these hiring.
While the company will honour the offers it made to campus hires, they will be deferred.
Employees are also likely to face deferment in hikes and promotions to deal with COVID-19. The company is already seeing budget cuts and drop in IT spends from clients. The company is also likely to see deferrals in payments and restructuring of existing contracts. All these will increase the working capital and put pressure on margins.
Abidali Neemuchwala, its CEO, said, “There has to be a trade-off, which will be in hiring, salary increases and sub-contracting costs."
The situation is more or less resembles the 2008 financial crisis but could get worse. Jatin Dalal, CFO, Wipro pointed out that the global financial crisis gives an early indicator of how this will impact the IT industry and going by reports it could be bigger than that.
During the recession, graduates from 2008 and 2009 batches were deployed as late as eight to 10 months. One of them recounted that they were not even sure if they would be called as the situation was only getting worse. While some of them joined startups, others had to wait for months to join the company.
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