IT services firm Tech Mahindra's net employee addition for the quarter ended June 30 declined by 4,103 employees on a sequential-quarter basis. This is in line with the industry-wide trend of slowdown in hiring amid macroeconomic challenges, demand uncertainties and delay in deal closures.
The total headcount for Q1 stood at 148,297. On a YoY basis, it was down by 9,738.
The attrition rate dropped to 13 percent from 15 percent in Q4. The firm has been seeing a drop in attrition rate since the first quarter of fiscal year 2023.
Tech Mahindra's Chief Executive Officer and Managing Director CP Gurnani said the company is focusing on building generative AI talent and has upskilled around 8,000 associates in Q1.
In January this year, speaking with Moneycontrol at the World Economic Forum in Davos, Gurnani, observed that hiring will be higher when attrition is higher, and net hiring will be low when attrition starts declining.
“Hiring cannot always be linear. The reality is that AI, data, and automation are part of our lives. If it is not linear, revenue goes up. If you don't hire, please do take into account that we are becoming more efficient with automation,” he had said.
Among its peers, barring Tata Consultancy Services (TCS), which added about 523 employees in Q1, all the other top companies including Infosys, Wipro and LTIMindtree cumulatively lost more than 20,000 employees in Q1.
Tech Mahindra announced its Q1FY24 earnings on July 26. The company's net profit declined 38 percent YoY, which stood at Rs 692.5 crore for the first quarter ended June 30, as compared to the same quarter in the last fiscal year. Sequentially too, net profit was down by over 38 percent.
Consolidated revenue for Q1FY24 stood at Rs 13,159 crore, growing 3.5 percent YoY as against Rs 12,708 crore reported in the year-ago period. Revenue was down by 4.1 percent on a QoQ basis, as against Rs 13,718 crore reported in the year-ago period.
EBIT margin too was a major miss at 6.8 percent as compared to analyst estimates, down from 11.2 percent last quarter.
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