The World Economic Forum (WEF) currently in Davos saw IT services companies meet their clients, and while executives expected pessimism, they say that their view has since shifted to be more cautiously optimistic and Tech Mahindra’s Chief Executive Officer CP Gurnani also subscribes to the same view.
Speaking to Moneycontrol’s Chandra R Srikanth on the sidelines of the WEF, Gurnani said since his 50-odd meetings, he doesn’t believe the way forward will be negative.
“In terms of how positive it would be, a lot depends on the way US Fed would react. There is always more than one layer that you need to unpeel because ultimately corporates do depend on some indications from the US. Otherwise, the mood looks moderately positive,” Gurnani said.
This comes in a quarter when IT companies have added fewer employees — with net addition in India’s top four IT companies down 93 percent sequentially. Lower net addition continues to be seen as an indicator of slowing growth but additionally, attrition, too, is coming down across companies.
Gurnani said that hiring will be higher when attrition is higher, and net hiring will be low when attrition is 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 said.
Slowing growth is also leading to concerns of growth slowing to mid-to-high single digits, according to a recent report by JP Morgan. “Even if it is 8-10% and JP Morgan is right, we should celebrate it. Though from a Tech Mahindra perspective, I would like to believe it is likely to be two-digit growth,” he said.
Succession plan
It was announced in 2022 that CP Gurnani would step down in 2023, with his last day being December 19, as things currently stand.
When asked about the succession plan for Tech Mahindra - a company that Gurnani joined in 2004 and has been the CEO of since 2012 - Gurnani said that a committee has been appointed to find a successor.
“The board has appointed a committee, and the committee will meet again when we get together for a Board meeting…the Board has met a few people internally and they will take a decision. Post the board meeting, I'll have a better status for you,” he said.
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