IT Jobs FY24 Review: Headcount Declines, Attrition Rates Improve for TCS, Infosys, and Wipro
Introduction
Leading Indian information technology (IT) companies Tata Consultancy Services (TCS), Infosys, and Wipro have recently released their Q4FY24 results, revealing a decline in their total employee headcount for the entire fiscal year. This decrease is attributed to the challenging macro environment, weak global demand, and reduced discretionary spending. Additionally, all three companies reported a sequential decline in attrition rates.
TCS: Innovating Through Challenging Times
- Net profit increased by 9% to ₹12,434 crore, while revenue from operations rose by 3.5% to ₹61,237 crore in Q4FY24.
- TCS experienced a decline in full-year headcount for the first time since its listing in 2004, with a drop of 13,249 employees. The total workforce now stands at 6,01,546 employees.
- Sequentially, TCS reported a decrease of 1,759 employees in headcount for the January-March 2024 period.
- Attrition rate improved to 12.5% in Q4FY24 compared to 13.3% in the preceding quarter.
Infosys: Navigating Uncertain Demand Conditions
- Net profit rose by 30% to ₹7,975 crore in Q4FY24, while total revenue increased by 1.3% to ₹37,923 crore.
- Infosys witnessed a decline in full-year headcount for the first time in 23 years, with 25,994 fewer employees. The total workforce now stands at 317,240.
- Sequentially, Infosys reported a decrease in headcount for the fifth consecutive quarter, with 5,423 fewer employees.
- Attrition rate improved to 12.6% in Q4FY24 compared to 12.9% in the preceding quarter.
Wipro: Adapting to Market Challenges
- Consolidated net profit declined by 8% to ₹2,835 crore in Q4FY24, while revenue from operations dropped by 4% to ₹22,208.3 crore.
- Wipro experienced a decline in full-year headcount for the second consecutive year, with 24,516 fewer employees. The total workforce now stands at 2,34,054.
- Sequentially, Wipro reported a decrease of 6,180 employees in headcount for the March quarter.
- Attrition rate remained flat at 14.2% on the last-twelve-month (LTM) basis.
Sector Outlook: Navigating Through Challenges
Analysts foresee near-term weakness in revenue growth for IT companies due to uncertain demand conditions. However, the strong order books of these companies are expected to support growth prospects in FY25. Despite the challenges, the long-term story for these companies remains intact.
- Infosys’ dependency on discretionary spends is leading to execution challenges, affecting its near-term growth.
- Wipro faces challenges in employee retention and satisfaction, impacting its ability to convert deals into revenue.
- Market analysts are closely observing factors such as client budgets in FY25, the consulting business, and the ramp-up of old and new deals to gauge future performance.
Evolution of Hiring Models
The rush to hire employees has cooled down as clients reduce discretionary spending and defer projects. As a result, attrition rates have decreased across the tech sector, and many companies have reported a reduction in headcount.
Key Takeaways
- TCS, Infosys, and Wipro experienced a decline in full-year headcount for FY24, with a total decrease of 63,759 employees.
- IT companies are navigating through a challenging macro environment, including weak global demand and reduced discretionary spending.
- Despite the short-term challenges, the outlook for FY25 appears stronger compared to the previous fiscal year
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