Despite slower attrition rate, headcount down for Infosys in Q4

With revenue growth impacted and uncertainty deepening in major markets, India’s second largest IT services firm, Infosys, saw a net reduction in its headcount in the fourth quarter of financial year 2022-23 (Q4FY23).

Infosys’ workforce saw a net reduction of 3,611 employees, bringing its total headcount to 343,234. This was also the first time in many years that the company did not provide a hiring target for the next fiscal.

In Q4, attrition at Infosys was at 20.9 per cent, down from the 24.3 per cent in Q3FY23 and 27.7 per cent in Q2.

“We hired around 51,000 last year. A lot of them are getting skilled and trained. So we have quite a leeway for the next few quarters in terms of the availability of freshers and, of course, with our agile model of doing both college and off-campus recruitment, we can always turn that up (for changing demand). So we have no specific number for FY24 at this stage. We have enough sitting on the bench,” said Nilanjan Roy, chief financial officer of Infosys.

The IT major’s utilisation, including trainees, was at 76.9 per cent in Q4, and excluding trainees it was 80 per cent.

Infosys reported a net reduction even as rival TCS added 821 employees in Q4. However, in Q3 TCS too saw a net decline of 2,197 in headcount.

What comes as a surprise is that Infosys has not provided any target for fresher hiring, which also means that the company does not see a major ramp-up in deals. Roy added: “Our model in terms of hiring has got enough flexibility to take care of new volume. In any case, we have enough bench [strength].”

Meanwhile, TCS announced a fresher hiring target of 40,000 for FY24 and it has already made 46,000 offers. The company also said it would honour all the offer letters and on-board freshers on time.

While the Infosys management blamed the higher bench as a reason for hiring less, it also acknowledged that there were ramp-downs in deals. Salil Parekh, chief executive officer and managing director of Infosys, said that the major impact for Q4 was due to ramp-downs.