TCS crosses the 6 lakh employee milestone even as 1 in 5 quit in the first quarter
- Indian IT services giant TCS reported a subdued first quarter of FY23, with its profit missing analyst estimates.
- The company also reported an increase in attrition rates and a slowdown in hiring, reflective of a challenging business environment.
- It revealed that its headcount is now over 6 lakh, despite 1 in 5 employees quitting in the June quarter.
AdvertisementIndia’s largest tech company TCS today saw the full impact of resignations, churn and the resultant salary hikes for the quarter — all of which shaved off its profit margins by 150 basis points.
Even in this high cost regime, the company chose to add employees - with net additions touching 14,136 over the last quarter. And, it also crossed a milestone of 6 lakh employees – and its total headcount is now at 6,06,331. That means it added 155 new employees every day.
Source: Company reports
Last quarter, it added over 35,000 employees. This is also a reflection of the number of people who have been quitting, as its attrition rate hit the highest at 19.7% — that’s more than double of what it was in the same quarter last year.
TCS admits that it’s a grave problem, but it will continue to ‘spend’ money to acquire talent. “We are making these investments to capture demand,” said Rajesh Gopinath, the CEO of TCS, at the earnings press conference.
Salary hikes in 5-8% range but top performers got better hikes
The company said its employees received salary hikes ranging between 5-8%, while top performers got even bigger hikes — without divulging details.
Overall, TCS has set a target of hiring 40,000 freshers this year. This went down from the 1 lakh target it had set last year. However, the company said it is on track to achieve its FY23 fresher hiring target.
TCS said that its workforce is diverse, comprising 153 nationalities and with women making up 35.5% of the base. It also claims to invest in organic talent development.
“In the first quarter, TCSers clocked 12 million learning hours, resulting in the acquisition of 1.7 million competencies,” the company said in a press release. It also accelerated its ‘return to office’ programme in Q1, with about 20% of the workforce now working from the office.
Tata Consultancy Services or TCS posted a 5% growth in net profits in the first quarter of FY23 at ₹9,478 crore; but its net profits fell by 5% on a quarterly basis – as it was hit by increased costs most of which was employee benefits. Its travel costs too ate into the profits even as its revenues grew by 16% on a yearly basis.
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