Top IT companies reduce hiring in first quarter of financial year 2022-23

After hiring a record number of employees in Q4 FY22, the top IT companies in India have reduced net employee additions in the first quarter of this fiscal.
Image for representational purpose only.
Image for representational purpose only.

BENGALURU: After hiring a record number of employees in Q4 FY22, the top IT companies in India have reduced net employee additions in the first quarter of this fiscal. Tata Consultancy Services (TCS), Infosys and HCL Technologies cumulatively added only 37,396 staff in the April-June quarter, compared to 68,257 employees in the January-March quarter.

Wipro and Tech Mahindra have added more employees - 22,308 in Q1FY23 as against 17,563 employees in the previous quarter. “Over the last few quarters, we have been hiring both lateral talent and fresh talent, and we think we have some additional capacity and that was the reason net hiring was lower than what we had in the past,” said HCL Technologies CEO and MD C Vijayakumar in an earnings call.

Analysts say that IT companies have reduced hiring considering the demand environment. But Vijayakumar said the company has not moderated any hiring based on any demanding environment. He added that the main reason was to increase utilisation and better deployment of freshers. HCL said that it will hire 30,000-35,000 freshers in FY23. “In this quarter, we plan to onboard 10,000 freshers, which will be one of the highest numbers of freshers that we have onboarded in the past five or six quarters,” he said.

Wipro will also be adding over 30,000 freshers in FY23. TCS said it plans to hire 40,000 freshers in this fiscal. TCS CEO and MD Rajesh Gopinathan said, “Q1 is a lighter quarter for trainee absorption, whereas Q2 and Q3 are the primary quarters. Last year, we had gone aggressive and hired through the year to build up over 100,000 trainee bench.”

IT firms have been reporting record-high attrition rates, and Infosys reported the highest attrition of 28.4% in Q1. Also, attrition continues to hit margins. Wipro CFO Jatin Dalal said employee costs have had a key impact on margins. TCS operating margin in Q1 stood at 23.1%, a contraction of 2.4% YoY. TCS CFO Samir Seksaria said,“It has been a challenging quarter from a cost management perspective. Our Q1 operating margin of 23.1% reflects the impact of our annual salary increase, the elevated cost of managing the talent churn and gradually normalising travel expenses.”

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