TCS slashes hiring to 22,600 in FY23 from 1.03 lakh a year back

Tata Consultancy Services: The country's largest IT services exporter has reported slightly lower than expected earnings for March FY23 quarter with consolidated profit growing 5% sequentially to Rs 11,392 crore led by other income. Consolidated revenue grew by 1.6% QoQ to Rs 59,162 crore with revenue in dollar terms rising 1.7% to $7,195 million and topline growth in constant currency 0.6%. On the operating front, consolidated EBIT rose 1.4% to Rs 14,488 crore with margin flat at 24.5% for the quarter. The company has announced a final dividend of Rs 24 per share. Meanwhile, the board has appointed K Krithivasan as MD & CEO of the company with effect from June 1, 2023 after resignation of Rajesh Gopinathan.

Tata Consultancy Services (TCS), which kicked off the earnings season on April 12, added 22,600 employees during FY23, a steep decrease as compared to its net addition in FY22. In the previous year, it had added 1.03 lakh employees on a net basis during the year. With this, the company’s headcount as of March 31, 2023, stood at 6,14,795.

This is the company’s lowest net headcount addition since FY15 when it had added 19,000 employees on a net basis during the year.

The company had added 40,185 employees on a net basis in FY21, 24,179 in FY20 and 29,287 in FY19.

During the last quarter of the fiscal, TCS saw a marginal increase of 821 employees on a net basis after last quarter’s decline of 2,197 employees, signalling the current stress in the IT sector. TCS added 35,209 employees in the same quarter last year.

TCS added 14,136 employees in Q1FY23, 9,840 in Q2, saw a decrease of 2,197 employees in Q3, and an increase of 821 in Q4.

Milind Lakkad, the company’s Chief Human Resources Officer, said, “We are honouring all job offers, and have added 22,600 employees on a net basis in FY 23. During the year, we onboarded over 44K freshers and our highest-ever number of experienced professionals.”

Last quarter, Lakkad said the hiring slowdown was not a blip, but was planned this way.

Attrition for the quarter fell to 20.1 percent, continuing its downward trend from last quarter’s 21.3 percent. As the talent market cools off, attrition rates have continued to normalise further, and it is also in line with the management’s commentary about attrition being expected to fall in coming quarters.

The hiring slowdown is on expected lines, as companies take a cautious approach to fresh hiring after the highs of FY22.

Experts Moneycontrol spoke to recently also expected a hiring slowdown in Q4FY23, and expect hiring to be subdued for at least the first two quarters of FY24.