TCS, Infosys, Wipro, HCL Will Hire 30% Less Freshers Due To Recession Scare
India’s big four IT firms have indicated worries regarding rising labor costs and their impact on profits in their most recent quarterly financial statements.
TCS, Wipro, Infosys and HCL have all reported healthy finances – but they’ve also warned of future challenges.
Infosys chief financial officer Nilanjan Roy said that they are “fueling the strong growth momentum with strategic investments in talent through hiring and competitive compensation revisions.”
He acknowledged its short term impact on margins but that it will also reduce attrition levels and position the firm for future growth.
The company reported the highest attrition rate of the four: 28.4 percent over the last twelve months.
Infosys had $4.4 billion in revenue – a 17.5 percent reported year-on-year growth.
Wipro’s operating margins were lower than anticipated, at 15 percent.
CEO Thierry Delaporte said he believes margins have “bottomed out.”
Chief financial officer Jatin Dalal said the “pyramid and fresher improvement” is required for improving the company’s margin.
It hired more than double of freshers than in FY’21.
In FY’23 it will once again hire more than double, which means that “our ability to correct the pyramid through consistent improvement of the base and moving people up through the pyramid would be a big structural lever.”
Delaporte said, “We announced moving to a quarterly promotion cycle, which will be effective, actually July 2022, and salary increases for all those eligible in September of this year 2022.”
He added that staff attrition rates continue to fall, and are currently at 23 percent over the last twelve months.
Wipro reported gross revenue at $2.7 billion, up 17.9 percent year-on-year.
The firm’s attrition rate stood at 23.8 percent.
CEO C Vijakumar said the company did not moderate any hiring based on demand.
It has been hiring both lateral and fresh talent over the last few quarters and now has some additional capacity.
This was the reason net hiring was lower than what it had in the past.
Chief financial officer Prateek Aggarwal said that margins were under pressure mainly due to increase in talent cost and transition cost.
HCL noted $3 billion in revenue, up 11.2 percent year-on-year.
Chief financial officer Samir Seksaria said that It has been a challenging quarter from a cost management perspective.
Its Q1 operating margin of 23.1 percent reflects the impact of annual raises, the increased cost of managing talent churn and gradually normalizing travel expenses.
He added, “However, our longer-term cost structures and relative competitiveness remain unchanged, and position us well to continue on our profitable growth trajectory.”
TCS reported overall revenues at $6.78 billion dollars, representing year-on-year growth of 10.2 percent.