Top Indian IT services majors Tata Consultancy Services (TCS), Infosys and Wipro reported full-year headcount decline together for the first time in at least 20 years. The three companies together saw employee count plunged by 63,759 in the fourth quarter ended March 31, 2024.
Wipro reported a decline of 6,180 employees in Q4 on April 19. This comes at a time when IT companies are looking to improve utilisation rate of existing employees amidst lowering attrition to expand operating margins.
On a full-year basis, Wipro's headcount was down by 24,516 in FY24, the second consecutive quarter of full-year headcount drop. The total headcount for FY24 stood at 2,34,054.
Sequentially, Wipro's attrition rate remained flat at 14.2 percent on the last-twelve-month (LTM) basis.
A similar trend was noted among Tata Consultancy Services (TCS) and Infosys, who reported a drop in full-year employee headcount for the first time historically. TCS’ headcount in FY24 was down by 13,249, while Infosys’ headcount dropped by 25,994. Sequentially, TCS lost 1,759 employees in Q4 and Infosys lost 5,423 employees.
What company managements said
Amidst an uncertain demand environment and macroeconomic headwinds, the IT companies are focused on improving utilisation rates, expanding margins and deploying benched employees. Some companies like Infosys are even seeing a hiring model shift.
Jayesh Sanghrajka, CFO, Infosys said, "We have changed our hiring model significantly. We no more hire all the freshers from campus. We hire less than half of them from campus and more than half of them off campus," he added.
According to Saurabh Govil, chief human resources officer (CHRO) of Wipro, the company is yet to complete on boarding of freshers who received offer letters during its post Covid hiring spree.
Govil said, “Campus hiring is a combination of looking at demand, utilisation and when the hiring is going to happen. We have significantly improved our utilisation this quarter, it’s an all-time high. We hope to increase and sustain that. We have been able to reduce our bench which was there and deploy people faster.”
“The year before last there was huge demand, so post Covid, we went to the campuses and made large number of offers. We are still to finish with all those offers. We have promised and we will first ensure all those offers are honoured before we go and hire somebody else. That’s the plan as we move forward," he added.
Explaining the current divergence between slowing headcount despite a strong deal pipeline and steady revenue growth, TCS CEO K Krithivasan told Moneycontrol, “We look at the trainees we deploy, we put them through our own internal training mechanisms and maybe after a period of 6 to 8 months, they become productive and billable. So, there will always be a lag.”
“In FY25, we will be hiring a very similar number of freshers like we did the year before,” he added, which will be in the tune of 40,000.
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