In an unprecedented shift for the information technology sector, Bengaluru-based IT behemoth Infosys has reported a notable decrease in its full-year workforce numbers. In the fiscal year 2023-24, the company’s headcount fell by 25,994—a 7.5 per cent reduction from the previous year, ending with a total employee strength of 317,240. This event marks the first time in nearly 23 years that Infosys has seen a decline in its annual workforce tally.
The announcement came in the wake of the company’s robust fourth-quarter results, which were declared on Thursday. Jayesh Sanghrajka, the Chief Financial Officer of Infosys, shed light on the company’s operational adjustments, “Our utilization rate has improved from 77 per cent including trainees at the start of the year. The growth environment at that point was much different, which led us to set distinct guidance.” As the fiscal year unfolded, the broader economic landscape transformed, prompting Infosys to recalibrate its business strategies accordingly.
“Given the change in the growth environment, we had to realign various factors. Now, our utilization stands at 82 per cent. Moreover, there has been a significant decrease in our attrition rates. These are the driving factors behind the net headcount reduction you’re seeing,” Sanghrajka elaborated. The company’s quarterly overview also reflected a trimming of the workforce, with 5,423 fewer employees being added in the last quarter compared to prior quarters.
Sanghrajka further explained the transformation in the company’s hiring practices – a strategic move that resonates with the firm’s revised operational goals. “We have changed our hiring model significantly. We no longer bring on board all the fresher talent directly from campus. Now, we hire less than half of them from campus and more than half off campus.”
Despite the reduced headcount, Infosys made it known that they remain on a growth trajectory, celebrating a substantial 30 per cent leap in net profits for the January-March quarter. The net profit climbed to Rs 7,969 crore, up from Rs 6,128 crore reported for the same period in the preceding year—an indicator of operational efficiency and fiscal health amidst strategic workforce reductions.
This development has not only sparked discussions around the evolving dynamics of the IT industry but has also highlighted the agility and adaptability of large corporations like Infosys in response to shifting market conditions. With fluctuating demands and the rapid embrace of digital transformation globally, IT companies are increasingly under pressure to optimize resource utilization and focus on productivity-driven growth.
However, the strategic shift in hiring has broader implications on the employment landscape, particularly for fresh graduates seeking entry into the tech industry. Infosys’ new approach prioritizes acquiring talent with specific skill sets and experience, reflecting a trend towards more targeted recruitment in the tech sector. This pivot from mass campus hires to a more selective off-campus hiring scheme could potentially influence the hiring practices of other IT companies as well.
In conclusion, Infosys’ latest workforce numbers and fiscal results underscore a season of recalibration for the firm. The company is actively steering its operational machinery to align with the contemporary demands of the IT sector while ensuring its financial footing remains strong. As Infosys navigates through these strategic changes, the industry at large watches on to see how this may set a precedent for future corporate restructuring in the world of technology and business.
