India’s largest IT services company Tata Consultancy Services (TCS) saw its headcount decline by 6,333 employees on a net basis in the second quarter of FY24, the company said while announcing its results for the quarter.
Last quarter, the firm added 523 employees. In a release, the company said the decline in headcount reflects “the company’s focus on improving workforce utilization and productivity.”
In a statement, Chief Human Resources Officer Milind Lakkad said the company’s strategy to hire freshers and train them is paying off.
“Our strategy of proactively hiring bright freshers and investing in training them with the right skills is paying off. With that talent coming on stream and with reduced attrition, we were able to recalibrate our gross additions, keeping it below the departures during the quarter, driving up productivity and enhancing project outcomes,” he said.
Speaking to mediapersons, Lakkad said they have been investing heavily in talent in the last few quarters, which has been paying off.
"There is reduced attrition. We have recalibrated our hiring numbers, and as a result, our total hiring is less than our attrition this quarter, and hence the negative number," he said.
He added that the company will continue to onboard trainees as it did in the quarter gone by, and will honour all offers. "The number of how many we get them every quarter depends on the business situation," he said.
In Q1FY24, TCS was the only one among the IT majors to add to its headcount, while all others saw a decline as they looked to increase utilisation in an uncertain and tough macroeconomic climate. There were few green shoots in the past quarter, and it is expected that IT majors will report a decline in headcount. Wage bills are some of the biggest expenditures for IT services companies, and they are now looking to utilise the talent they have.
With the headcount decline, the company’s headcount stood at 608,985 as of September 30, 2023.
Attrition numbers also continued their downward trend, coming in at 14.9 percent on the last-twelve-months basis, down from last quarter’s 17.8 percent.
Net addition and hiring has slowed to a crawl across the industry, and is not an isolated phenomenon at TCS.
In the same quarter last year, TCS had added 9,840 employees.
TCS continues to see delays in the onboarding of laterals, which has continued for several months.
Last quarter, the company rolled out salary hikes to its employees during the quarter. It gave 12-15 percent for exceptional performers, and undertook a promotions cycle.
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