64,000 Employees Exit Top 3 Indian IT Companies In FY24
Top 3 Indian IT companies witness mass exodus of 64,000 employees in FY24 amid global demand slump and client spending cuts.
India's largest IT services companies Tata Consultancy Services, Infosys and Wipro saw a staggering 64,000 employees exiting in FY24, amid a weak demand environment globally and tighter tech spends by clients.
Wipro, which announced its Q4 earnings on Friday, reported a fall in headcount numbers to 2,34,054 as of March 2024, against 2,58,570 in the year-ago period. Headcount declined by 24,516 during the financial year ended on March 2024.
"...immediate headcount reduction has happened primarily driven by the market and demand environment as well as the operational efficiency which we have driven, which is reflective in our margins," Saurabh Govil, Chief Human resources officer at Wipro said.
In the long term, as the company moves into more IP-based platform and Artificial Intelligence, there could be divergence coming in terms of headcount growth, he added.
India's IT services industry - a $254 billion powerhouse - has been feeling the heat of global macroeconomic uncertainties and geopolitical flareups as clients turned cautious with IT spends.
India's second largest IT services exporter Infosys reported total headcount of 317,240 employees as of March 2024, down by 25,994 from 343,234 employees in same period of the previous year.
"When we started, we were at 77 per cent utilisation including the trainees. The growth environment was different at that time. Our utilisation has gone up to 82-83 per cent. Our attrition has also come down significantly. That is the reason for net headcount reduction," Infosys CFO Jayesh Sanghrajka had said on Thursday during the company's Q4 results.
The company registered an attrition of 12.6%.
"Hiring model has changed in the last few years. We are now on a more agile model of campus hiring. At this point of time we are at 82% utilisation. We still have headroom over that and attrition is very low so we have not decided on campus hiring numbers at this point of time," Sanghrajka had said.
Larger rival TCS also saw a decline in its headcount by 13,249 employees to end the fiscal with 601,546 employees.
Wipro on Friday reported 7.8% year-on-year decline in its consolidated net profit for the March quarter to about Rs 2834.6 crore, and cautioned that the macroeconomic environment remains 'uncertain'. While the headline numbers were more or less in line with expectations, the company has given IT Services revenue growth guidance in the (-)1.5% to +0.5% band for the June quarter on a constant currency basis.
On Thursday Infosys disappointed with its forecast of a 1-3% annual revenue growth for FY25, raising concerns that the global macroeconomic uncertainty continues to weigh in on client decisions and discretionary spends.
Infosys' weak, somewhat realistic, guidance dragged down its US-listed shares, as analysts wondered if the global cues could push recovery to the second half of the fiscal for the Indian IT industry.
Last week, TCS reported a 9% growth in net profit at Rs 12,434 crore in January-March quarter of FY24 due to strong domestic business even as the company struggled in its key markets overseas.