Profit Up, Headcount Down: TCS and Infosys Report Significant Employee Reductions for the First Time in Decades

Tata Consultancy Services (TCS) experienced a significant reduction in its workforce, marking the first time in nearly two decades that the leading IT firm has reported a decrease in headcount. Despite this, TCS saw an increase in net profit and revenue during the same period.

TCS Key Facts and Insights:

• TCS’s total employee count at the end of the financial year 2023-24 was 601,546, reflecting a net reduction of 13,249 employees year-on-year.

 

• This year's drop is the first in 19 years for the company, showcasing a notable shift in its employment trend.

 

• The fourth quarter alone saw a decrease of 1,759 employees, continuing a pattern of decline observed over three consecutive quarters.

 

• Despite the decrease in workforce numbers, TCS reported a 9% increase in net profit for the January-March quarter of FY24, rising to ₹12,434 crore from ₹11,392 crore in the same quarter the previous year.

 

• Revenue also rose by 3.5% to ₹61,237 crore during the quarter.

 

• The company highlighted a decrease in attrition rates to 12.5%, a positive reception to campus hiring initiatives, and an increase in employee engagement as factors contributing to heightened morale and productivity.

 

Infosys:

 

Infosys, a leading IT firm, reported a significant reduction in its workforce for the first time in nearly 23 years during the financial year 2023-24. Despite this decline in headcount, the company saw a substantial increase in net profit and an improvement in utilization rates.

Infosys Key Facts and Insights:

• Infosys ended the financial year 2023-24 with 317,240 employees, marking a 7.5% decrease from the previous year, translating to a reduction of 25,994 employees.

 

• The company's employee utilization improved over the year, increasing from 77% at the beginning of the year to 82% by the end.

 

• Attrition rates at Infosys also decreased significantly, contributing to the net reduction in headcount.

 

• Infosys has revised its hiring model, reducing campus hires to less than half while increasing off-campus hires.

 

• Despite the reduction in workforce, Infosys declared a 30% increase in net profit for the January-March quarter of FY24, amounting to ₹7,969 crore, up from ₹6,128 crore in the corresponding quarter of the previous year.

 

• These changes reflect adjustments to the shifting growth environment as mentioned by CFO Jayesh Sanghrajka during the fourth-quarter results announcement.

 

 

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