New Year: Market observers predict that higher attrition rates in the Indian IT industry over the next two to three quarters will be eased by concerns about an impending global slowdown and a wave of start-up layoffs, even as most major tech companies continue in the September quarter. Announced to ease supply side pressure.
Infosys, whose high attrition rates had earlier worried analysts, reported a decline of 27.1 per cent in the recent quarter, compared to 28.4% in the June quarter.
In Q2FY23 for Wipro, attrition declined from 23.3 to 23% as compared to the previous quarter. HCL Tech's attrition rates were rising since the quarter ended September 2021 (15.7% in Q2FY22), but they reached a plateau at 23.8% in Q2 FY23, remaining at the same level as the June quarter (Q1FY23).
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“It has already stabilized and provides an initial picture of where we are and what we expect going forward. We are thus in a good position there,” Ram Sundararajan, Chief Public Officer, HCL Tech, told Q2 earnings. Made this statement during the briefing.
Tata Consultancy Services (TCS) reported that its LTM, or workforce, in the IT services sector grew slightly to 21.5% over the past twelve months, but the company was quick to add that this churn would "settle down" in the coming months. " will begin. ,
The company said during the earnings call that the overheated technology job market is starting to cool down and new hires' compensation expectations are also becoming more reasonable.
Overall, the Q2 scorecards of Tier 1 Indian tech companies clearly indicate that the supply side pressures are about to ease.
Milind Lakkar, Chief Human Resource Officer, TCS, said: “The need to recruit experienced talent is decreasing as the supply across the industry is increasing. Hence, in the coming months, we should start seeing churn. We are confident that our quarterly annual attrition rate peaked in the second quarter and should begin to decline in the second half based on monthly trends."
The largest IT services provider in India added a net 9,840 employees during the quarter, taking the total workforce to 6.16 lakh.
TCS said that its new fare for FY23 is running as per schedule. The company hired 35,000 new people in the first half of the fiscal year, of which 20,000 were hired in the second quarter. The company respected every offer made by it.
Infosys, which shares the top deck of outsourcing contracts with TCS, Wipro and HCL Technologies, reported a reduction in attrition rates, hovering above peers.
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During a recent earnings call, Infosys CEO Salil Parekh said, “On a quarterly annual basis, our workload has been reducing for three quarters, which now includes the second quarter and we see this trend as a downward trend. Huh.
Tier 1 Indian IT companies released their Q2 financial results last week amid a tough macroeconomic environment in the US and Europe, which serve as the backbone of the Indian IT industry.
Economic commentators have warned of the risks of an impending recession and global market shocks as a result of storm clouds looming large over the world economy.
US-based businesses, including several tech companies, collectively laid off thousands of employees in 2022 alone and put the brakes on hiring, according to reports.
When it comes to whether the cost-cutting strategy of US and European businesses will continue to produce significant outsourcing gains in the upcoming quarters in favor of Indian service providers, to offset any slowdown or pressure on customers' discretionary IT spending, on the market. enough to stop. The supervisors at home are divided.
In the last 12 months for the quarter, Wipro's voluntary withdrawals were measured at 23%, down 30 bps from the quarter ended June 2022. During the second quarter of FY22, it had a low attrition rate of only 20,5%. ,
Wipro had 259,179 employees working in IT services as on September 30, 2022, up from 258,574 at the end of June. Wipro has added a total of 605 new employees.
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Veteran businessman Ganesh Natarajan notes that despite an improvement in employee retention in the recent quarter, industry shortfalls are still higher than average.
He estimates that in the coming quarters, the job loss rate will drop to the late teens as macroeconomic concerns are set to weigh heavily on the minds of IT professionals, who till recently had plenty of job options available.
“Most people now understand that larger businesses will do better in tough times than smaller ones. Thus, now may not be the best time to jump in.