Flood of freshers at IT’s Big Four; Byju’s raises $250M, eyes $500M more

By Daisy On Oct 18, 2022

In the first half of FY22, India’s top four IT services companies hired a combined 97,000 freshers. Fast-forward a year, and despite facing strong macroeconomic headwinds, these companies have increased their intake of freshers, hiring over one lakh of them in the first half of FY23.

Also in this letter:
■ Byju’s closes $250 million funding from existing investors
■ Meta’s India ad revenue up 74% to Rs 16,000 crore in FY22
■ Cognizant joins peers in rolling out 7-10% salary hikes

Top four IT firms hire over one lakh freshers despite headwinds

India’s top four IT service providers have hired over 105,000 freshers during the first half of the fiscal year despite forecasting lower numbers than last year’s. In the first half of last year, these companies onboarded a combined 97,000 freshers.

Managing attrition: As existing junior employees become billable at a time of macroeconomic uncertainty, companies are looking to improve utilisation levels and doubling down on training programmes while reducing dependency on lateral hiring.

Barring Tata Consultancy Services (TCS), the rest of the IT service providers have reported stable or lower attrition numbers compared to the previous quarter.

What’s the plan? As of the second quarter, IT companies have not indicated any major change in their fresher intake plans for the year except TCS, which has upgraded its fresher hiring guidance from 40,000 to 47,000.

Following a period of aggressive talent acquisition during FY22, when industry leaders hired over 230,000 freshers, the top four IT companies are expected to hire a total of 157,000 freshers by March 2023, a reduction of over 30%.

Infosys said it would recruit 50,000 people from campuses this year and had already onboarded 40,000 freshers during the first half.

Wipro plans to hire 30,000 freshers for FY23. HCLTech added over 16,000 freshers during the first half and plans to hire around 30,000 freshers during the fiscal year.

Bracing for a chilly winter: On Monday, we reported that there is an underlying sense of unease at the top four IT services firms as the energy crisis in Europe and rising inflation in the US threaten to disrupt the macroeconomic situation.

The Times of India reported on Monday that with Europe slowing and the fears of a US recession rising, India’s four companies have sharply reduced their hiring.

Also Read | IT industry could fall apart due to moonlighting: TCS COO

Byju’s closes $250 million funding from existing investors

Byju’s closed a funding round of $250 million from its existing investors on Monday.

Details: Qatar Investment Authority (QIA) led the round with an investment of over $100 million, sources told us.

The fundraise involved the sale of shares by existing investors, who sold portions of their stakes in the edtech firm.

Byju’s closed the round at a valuation of $22 billion, the same as in its previous round, the sources said. Two people in the know said other existing investors including Tiger Global and Sequoia Capital also participated.

Easy come, easy go: The edtech major will use the money to pay pending dues to global private investment firm Blackstone for its $950 million acquisition of Aakash Institute in April 2021, our sources said.

We reported on September 24 that Byju’s had cleared payments of $234 million to Blackstone three months after the original repayment deadline of June.

More funds incoming: According to our sources, Byju’s is in talks to raise another $500 million through convertible notes from new and existing investors as a part of its pre-IPO funding.

Controversy: India’s largest edtech firm has been facing turbulent times over the past six months, with questions being raised about the 18-month delay in announcing its audited results. In September, it finally released its audited FY21 results, showing losses swelled to Rs 4,588 crore after changes to its revenue recognition method.

Last week, the company said it would fire 5% of its 50,000-strong workforce or about 2,500 employees.

Meta’s India ad revenue up 74% to Rs 16,189 crore in FY22

Facebook India Online Services, the flagship registered entity for Meta in India, clocked gross ad revenues of Rs 16,189 crore in FY22, registering 74% year-on-year growth, according to the company’s regulatory filings.

By the numbers: The company’s net profit grew 132% year-on-year to Rs 297 crore during the same period.

Facebook India Online Services paid a Rs 907 crore equalisation levy to the government on gross ad revenues in the fiscal year 2021-22, as per the RoC filings.

Facebook India buys ad space from Meta Platforms Inc USA. When selling to their Indian customers, Meta India applies some markup to the cost of goods sold.

For Meta India, Rs 15,120 crore was the cost of ad inventory.

Meta India’s total income in the fiscal year 2021-22 was Rs 2,324 crore, which includes net advertiser reseller revenue (Rs 889 crore), IT-ITeS services (Rs 1,420 crore) and other income (Rs 15 crore), as per the filings.

Cognizant joins peers in rolling out 7-10% salary hikes

Software services provider Cognizant began rolling out annual salary hikes for its employees on Monday, joining peers such as TCS and Wipro in offering merit salary increases (MSI) amid gathering macroeconomic headwinds and a tight labour market.

Cognizant had told its employees last week that “formal eLetters” with the new compensation would be out through the week, with the increases taking effect from October for levels up to associate director.

People aware of the salary increases told us they ranged between 7% and 10%.

Cognizant hires Infy veteran: Meanwhile, Cognizant said it has hired former Infosys president Ravi Kumar to lead its Americas market, bolstering leadership in its largest market, which until now was overseen by interim chief and Cognizant veteran Surya Gummadi.

TWEET OF THE DAY

Govt can’t issue general blocking orders, Twitter tells K’taka High Court

Twitter told the Karnataka High Court on Monday that the central government cannot issue general orders calling for the blocking of social media accounts unless the content violates guidelines in Section 69A of the Information Technology Act, 2000.

The court was hearing a plea against 10 blocking orders for 39 URLs issued by the central government between February 2021 and February 2022.

Arguments: Senior advocates Arvind Datar and Ashok Haranahalli, who appeared for Twitter, told the court that such blocking orders not only affect the rights of the primary user but also the intermediary and, hence, intermediaries were entitled to challenge them.

The Union government argued that Twitter, as a foreign platform, cannot seek freedom of speech and other fundamental rights available to Indian citizens for users of the platform.

It also submitted that the directions to block certain Twitter accounts were issued in the national and public interest, and to prevent incidents of lynching and mob violence.

Value-fashion retailer V-Mart buys LimeRoad in slump sale

V-Mart, a value-fashion retailer, has signed a definitive agreement to acquire discovery marketplace LimeRoad on a slump sale basis. The completion of the transaction is subject to necessary approvals and closing conditions.

Details: V-mart said in a stock exchange filing it will pay a lump sum of Rs 31.12 crore cash, subject to mutually agreed adjustments by both parties.

“As part of the acquisition of LimeRoad business, the company is also acquiring assets worth approximately Rs 14.61 crore and assuming current liabilities of Rs 36.26 crore,” the retailer added.

V-Mart also plans to invest Rs 150 crore to help LimeRoad scale and achieve sustained profitability.

LimeRoad’s founder Suchi Mukherjee will join V-Mart’s leadership team as the CEO of LimeRoad and its omnichannel business, while cofounder Ankush Mehra will continue as chief operating officer.