Infosys says no campus hiring this year

Tech giant Infosys witnessed a further net reduction of 7,530 employees in the quarter-ended September, the firm’s financial results for the second quarter of the fiscal showed on October 12.

This is the sixth consecutive quarter that Infosys has been seeing a decline in hiring and the second quarter in a row when its total workforce strength has slipped. In the April to June quarter, the company’s headcount had reduced by 6,940 staffers. At the end of the September quarter, Infosys had a total of 3,28,764 employees compared to 3,36,294 when the previous quarter concluded.

Voluntary attrition — the rate at which employees depart an organisation, (whether voluntarily or involuntarily) — has slowed down to 14.6% versus 17.3% in the April to June quarter.

Infosys CEO Salil Parekh said the company is carrying inefficiencies in its employee pyramid and has enough room to tighten utilisation to 84-85%, which is a margin lever for the firm. He said the company has a tremendous focus on cost efficiency and automation, in which it has an advantage and is winning mega deals.

The firm’s Chief Financial Officer Nilanjan Roy, in a press briefing, said, Infosys still has a significant fresher bench that is training on Gen AI, etc. and every quarter, the number of employees training in GenAI is going up. Therefore the company is not looking to make fresh campus hires yet, he said.

"As we see it, not likely that we will go to campuses for hiring this year, will have to watch the situation every quarter," he added.

Amid reports of IT services firms ending hybrid and work-from-home modes of working and asking employees to return to the office, CEO Parekh said, “We are very clear that we want to remain flexible with our employees. We’re seeing more and more employees back on the campus each week and we expect this to continue."

Over 70% of employees are back on campuses as of now, he added.

Infosys said that wage hikes (which are typically rolled out from April for employees below the senior management but were deferred) will be effective from November 2023.

Reflecting on the war situation in Israel, CEO Parekh said,  the firm's employees there are safe and that "We have a plan to help and support our employees there in case there are further developments."

Infosys’ peer Tata Consultancy Services (TCS) also reported a similar hiring scenario. The latter saw an overall headcount dip of more than 6,300 employees during the quarter under review though it said, its Gen-AI-ready workforce was over a lakh strong.

The companies’ hiring numbers are in line with analyst expectations as they’d suggested the sector, especially the top five IT services firms, would continue to see degrowth in the September quarter, as in the first quarter on account of a soft demand scenario and excessive hiring during the COVID-19 period.

Sunil C, CEO of TeamLease Digital, had earlier told CNBC-TV18 that overall employee requirements of tech services firms are still negligible and most hiring is replacement for critical talent.

“Most of the long-term transformation projects have been broken down to critical small projects which can immediately impact either productivity, grow revenue or improve customer experience which in effect means hiring will continue to be subdued or selective. Most of the organisations are continuing to focus on short-term return on investment (ROI) through measures such as cost rationalising, improving utilisation and automation,” he said.