Financial results of TCS and Infosys for Q4 have shown that the major IT companies have slowed down on hiring amid global economic uncertainty and the BFSI stress. The slowdown in IT hiring during Q4 comes after a similar trend was also recorded in the previous quarters also. In the March 2023 quarter, TCS recorded just 821 net additions after a decline of 2,197 in the previous quarter, while Infosys also witnessed a fall in hiring to 1,627 employees.
In terms of TCS’ Q4 hiring update, its global employee headcount stands at the end of Q4 is 6,14,795. A total of 821 net additions were done during the quarter after decline of 2,197 in the last quarter. The LTM (last twelve month) attrition dropped by 120 basis points and is at 20.1 per cent, which is however also lower than the previous quarter.
In Q3FY23, TCS reduced its workforce by 2,197 employees to 613,974, compared to the headcount of 616,171 employees in the September 2022 quarter.
Meanwhile, Infosys’ voluntary attrition (LTM – IT Services) stood at 20.9 per cent, showing a declining trend. The company’s total employee counts at the end of quarter four stood at 3,43,234, which is lesser by 3,611 from the third quarter headcount of 3,46,845.
Attrition has continued its downward trajectory. After reaching 28.4 per cent in Q1FY23, it slipped to 27.1 per cent in Q2FY23 on a trailing twelve-month basis. During the third quarter, the company added 1,627 employees, which was a decrease from the previous quarter.
The Fall in IT Hiring
The fourth quarter of the last financial year 2022-23 was marked by negative events globally in the banking sector, including the collapse of Silicon Valley Bank. The IT sector has significant exposure to the BFSI sector. The crisis in the banks affected the IT companies in India also. Apart from this, the IT sector has also been of late resorting to mass layoffs in order to cut costs amid uncertainty.
Infosys revenue from the financial services segment fell 3.7 per cent sequentially to Rs 10,818 crore in the March 2023 quarter, while the revenue growth of TCS in the BFSI segment declined to 9.1 per cent in Q4 FY23 from 11.1 per cent in the previous quarter.
Apart from BFSI, other segments of the IT sector also lagged.
Infosys’ retail business revenue rose just 1.04 per cent sequentially to Rs 5,537 crore, while manufacturing revenue was almost flat. Its communication revenue fell 6.34 per cent qoq.
During earnings presentation after the Q4 results announcement on April 13, Infosys CEO Salil Parekh said, “During the quarter, we saw unplanned project rampdowns in some of our clients, and delays in decision-making, which resulted in lower volumes. While we saw some signs of stabilisation in March, the environment remains uncertain.”
He also said Infosys is working closely with clients and their connect will help the company massively. “As the environment has changed, we see strong interest from our clients for efficiency, cost and consolidation opportunities, resulting in a strong large deal pipeline.”
In Q4 FY23, Tata Consultancy Services (TCS) recorded a 14.8 per cent jump YoY in its net profit to Rs 11,436 crore. The revenue from operations of India’s largest IT services company also rose 16.94 per cent to Rs 59,162 crore, compared with Rs 50,591 crore in the year-ago period. TCS’ net profit had stood at Rs 9,959 crore in the corresponding period last year (Q4 FY22).
Infosys has reported a net profit of Rs 6,128 crore for the fourth quarter ended March 2023 (Q4 FY23), a jump of 7.8 per cent over the year-ago period. Its revenues during January-March 2023 increased 16 per cent to Rs 37,441 crore, compared with Rs 32,276 crore a year ago. The net profit of Infosys had stood at Rs 5,686 crore in the corresponding period last year.
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