Quess Corp headcount likely to fall 10-15% in Q1 amid Covid-19 crisis

Firm is hopeful of returning to growth path once major cities open up

Business services provider Quess Corp, India’s largest private sector employer, is likely to see a 10-15 per cent reduction in headcount in the first quarter (Q1) of the current financial year (2020-21, or FY21) because of the Covid-19 crisis.
 

Though fall in the number of associates is expected to affect the earnings of the Bengaluru-headquartered company in Q1, the management is hopeful of returning to the growth path once major cities open up.
 

“Our headcount was only down by around 5 per cent between February and April. We see another 5 per cent reduction in May, and a similar reduction in June,” said Suraj Moraje, group chief executive officer and executive director. “By June, if all the cities open up, including Mumbai and Delhi, there will be sufficient demand so we don’t see shrinkage (in our revenues) and will grow. But, it is difficult to predict as of now.”
 

Quess Corp had 384,000 staffers at the end of March 2020, 21 per cent more than the previous financial year. In FY20, it posted a 29 per cent rise in revenue at Rs 10,991 crore.
 

The company draws 79 per cent of its revenues from providing general staffing, under which it manages long- and short-term hiring, payroll management, statute and compliance management, among others, for clients. Around 14 per cent of its revenues come from IT staffing, while 3 per cent come from skill development-related services.

 

As most establishments were closed in April and May, the demand for contractual staffers reduced. However, Moraje, who took charge as CEO in April, said Quess will gain market share as many smaller vendors are likely to leave the market altogether because of liquidity issues.
 

“We are very focussed on gaining market share. We have already seen a flight towards larger players. Also, formalisation of labour force will help,” said Moraje.
 

The company is also pursuing cost optimisation to conserve cash. In April, it reduced its indirect cost by around 20 per cent and drew additional credit line of Rs 100 crore to meet liquidity related issues.
 

“We also have done some portfolio adjustment. For example, we have decided not to take up any new training programme with the government for now. Similarly, we plan to reduce our exposure to low margin IT staffing and focus on the high margin segments,” said Moraje, adding that the company would emerge stronger in the post-Covid world.