India's largest IT exporter Tata Consultancy Services Ltd indicated that it will not be very aggressive in hiring this year, and will instead focus on utilizing the people it has taken onboard last year.
"While we are committed to honor all the offers we have made, our focus will be on leveraging the capacity we built last year,” Milind Lakkad, Chief HR Officer of the company said.
The company, as such, net hired just 523 new employees during the three months ended June, taking its total workforce to 6.15 lakh.
This comes close on the heels of unprecedented hiring done by IT companies over the last two years as they struggled to cope with a sudden surge in contracts from the US and European markets.
The fight for talent had led to high levels of attrition in the IT industry. But Lakkad said the situation is expected to return to normal by the second half of the current year. As of the end of June, attrition was at 17.8% on a 12-month basis.
"Our attrition continues to trend down and we expect it to be back in our industry-leading, long term range in the second half of the year," he said.
The company said it gave 12-15% raise for exceptional performers in its latest compensation review.
It said 55% of the workforce are attending the office at least thrice a week.
The company, meanwhile, reported net profit above analysts' expectations.
Net profit came in above expectations at Rs 11,120 crore. The Street was looking for Rs 10,907 crore.
However, first-quarter revenue was below estimates at Rs 59,381 crore. Analysts were expecting revenue of Rs 59,615 crore.
The miss on revenue seems to have come from a lackluster performance in the US market.
As a result, while United Kingdom grew by 16.1% year on year, North America grew by only 4.6%. Continental Europe, which is seeing the impact of the Russo-Ukraine war, also disappointed by growing at just 3.4%.
In emerging markets, Middle East & Africa grew 15.2%, India grew 14%, Latin America grew 13.5%, and Asia Pacific grew 4.7%.
The company, however, said it witnessed a hit to its operating margin due to salary hikes that took effect on April 1.
"Our operating margin of 23.2% reflects the 200-bps impact of this hike, offset through improved efficiencies," said Samir Seksaria, Chief Financial Officer.
For the preceding, fourth quarter, the company had missed street estimates. For the three months ended March, the company had posted net profit of Rs 11,392 crore, registering a growth of 14.8% year on year.
In the January-March quarter, revenue from operations had grown by 17% to 59,162 crore.
The company had, three months ago, said that its results were being impacted by some of North American bank clients deferring spending in the wake of a crisis in the sector in the US. At the time, the company said it saw "a lot of uncertainty" in its banking, financial services and insurance segment in the near term.