Capgemini Hired 44% Less Employees In Sep Quarter; Hiring Activity Will Slow Down For Next Quarter

Capgemini plans to slow down hiring due to slowing growth and reduced attrition levels.

It has a significant number of employees in India, with over a lakh-and-a-half employees in the country.

Slow growth

It announced its results for the third quarter, sharing that demand was decelerating in the coming quarters.

Chief Executive Officer Aiman Ezzat said that 2023 will be a year of growth, even if not as strong as 2022.

Headcount

Net addition for the September quarter was 6,300 employees, down from 11,400 the previous quarter.

Total headcount was 3,58,400 as of September 2022.

Capgemini’s Indian counterparts also have reduced hiring after the pandemic-fuelled demand led to a war for talent.

Reducing hiring

Comparatively, net employee addition by TCS, Infosys, Wipro, and HCLTech was down 45 percent in the quarter ending September as compared to the preceding quarter.

Ezzat said that since they are not going to grow as much, it makes sense to hire fewer people.

Slowed attrition

Another factor he spoke about was the moderating attrition reducing the need for new hires.

Attrition in Q3 was at 26.8 percent, down from 27 percent last quarter and 26.2 percent in Q1. 

In the year-ago period, attrition stood at 19.5 percent.

CFO Carole Ferrand said, “We expect attrition to moderate further going forward as the demand environment and talent market are normalising progressively.”

No need to “over hire”

For India, based on the resignations they saw in Q3, attrition here is reducing quite a bit. 

While the attrition is still “too high”, it’s a significant reduction from what the company has seen, he said.

He further said they do not need to “over hire” and can start looking at some operational optimisation in utilisation and other areas.

“It’s an opportunity to tighten operationally…

Most people [counterparts in the industry] have reduced significantly the hiring now because of the expected somewhat lower growth and of course reduced attrition,” Ezzat said.

Resources

When it comes to resources, he added that he sees less tension on resources in Q4 and Q1 2023 in terms of volume.

“I can tell you see plenty of tension in terms of finding the architects on cloud or finding a great data scientist, finding people with strong industry expertise…,” he said.

Ezzat’s comments come at a time of macroeconomic concerns and the economic slowdown which has impacted tech budgets of clients.

Revenue for the quarter was 5.55 billion euros, up 15.7 percent from the year-ago period in constant currency.