IT giant Tata Consultancy Services’ (TCS) attrition rate for the quarter ending December 31, 2022, inched lower to 21.3%. TCS expects the IT services attrition rate to drop further in the company quarters. However, sequentially, the company carried layoffs during the Q3 of FY23 as its workforce was reduced by 2,197 employees.
As per the regulatory filing, the TCS workforce stood at 613,974 by end of the December 2022 quarter. This would be a net reduction of 2,197 employees compared to a headcount of 616,171 employees in the September 2022 quarter.
TCS had made the second highest hiring among its peers after Infosys in Q2FY23 with a net addition of 9,840 employees compared to the June 2022 quarter where headcount stood at 606,331 employees.
In its financial audit report, TCS said the improved productivity was achieved by focusing on utilizing the excess capacity built up over prior quarters and through investments in organic talent development. In Q3, TCSers clocked 11.4 million learning hours, resulting in the acquisition of 1.3 million competencies.
Notably, the company’s workforce continues to be very diverse, comprising 153 nationalities and with women making up 35.7% of the base.
Coming to IT services attrition, the Tata Group-backed company posted an attrition rate of 21.3% on an LTM basis which is lower than 21.5% in Q2FY23. TCS said, the attrition rate “is expected to fall further in the coming quarters.”
Milind Lakkad, Chief HR Officer, on Monday said, “Our focus over the last few quarters on bringing in fresh talent at scale, training them on new technologies and making them productive is paying off.”
Lakkad added, “We are particularly proud of having 125,000 TCSers at middle and senior levels who have been with the company for more than 10 years on average. They have been central to the successful cultural integration of all the fresh talent we have onboarded in the last couple of years, and their contextual knowledge and customer-centricity have been key to the high level of customer satisfaction that TCS is known for.”
Overall, in Q3FY23, TCS missed estimates in terms of profitability but surpassed expectations in regard to the top-line front.
During the third quarter, TCS posted a consolidated net profit of ₹10,846 crore attributable to shareholders rising by 11.02% YoY and 3.98% QoQ. Consolidated revenue from operations came in at ₹58,229 crore increasing by 19.11% YoY and 5.28% QoQ. In terms of constant currency, the revenue growth was at 13.5% YoY driven by business in North America and the UK. Meanwhile, the net margin stood at 18.6% for the quarter, whereas the operating margin stood at 24.5% contracting by 0.5% YoY.
Rajesh Gopinathan, Chief Executive Officer and Managing Director said: “We are pleased with our strong growth in a seasonally weak quarter, driven by cloud services, market share gains through vendor consolidation, and continued momentum in North America and UK. The sustained strength of demand for our services is a validation of the value we provide to our clients in helping them differentiate themselves while enhancing their competitiveness. Looking ahead, and beyond current uncertainties, our longer-term growth outlook remains robust.”
TCS order book stood at $7.8 billion as of December 31, 2022.
The company announced a third interim dividend of ₹75 per equity share including a special dividend of ₹67 per share. The record date for this dividend is fixed on January 17. TCS plans to pay the dividend by February 3rd, 2023. Livemint