Infosys attrition rate drops in Q3, net employee addition slows down
2 min read 12 Jan 2023, 03:47 PM ISTIn Q2, the company had revealed that they have already hired 40,000 freshers from its target of hiring 50,000 freshers. Infosys expects the number to go up for the year ahead.
PremiumInfosys has announced its financial results for the third quarter ending December 31, 2022 (Q3FY23) period. During Q3, the IT giant continued to record a sharp decline in its attrition rate, however, its net addition of employees slowed down drastically on a quarter-on-quarter basis. In terms of profitability and top-line front, the company beats estimates during Q3FY23.
As per the regulatory filing, Infosys' attrition rate of IT services stood at 24.3% in the December 2022 quarter --- down by a huge 2.8% from 27.1% in September 2022 quarter. During the June 2022 quarter, the attrition rate was 28.4%.
Year-on-year, Infosys attrition rate has also declined by 1.2% from 25.5% in the December 2021 quarter.
On the latest financial results, Nilanjan Roy, Chief Financial Officer said, "operating margins in Q3 remained resilient due to cost optimization benefits which offset the impact of seasonal weakness in operating parameters."
Roy added, "attrition reduced meaningfully during the quarter and is expected to decline further in the near term."
In terms of total headcount, Infosys posted total employees of 3,46,845 in Q3FY23 --- a net addition of 1,627 employees compared to 3,45,218 employees posted in Q2 of FY23. Compared to the Q3FY22 quarter where the headcount was at 2,92,067 employees, Infosys' net addition stood at 54,778 employees in Q3FY23.
Of the total headcount, Infosys made a net addition of 1,150 quarter-on-quarter and 52,354 year-on-year in S/W professionals. While the company added 477 QoQ and 2,424 YoY in the sales and support team during Q3FY23.
As of December 31, 2022, Infosys count of S/W professionals stood at 3,29,296 employees versus 3,28,146 employees in Q2FY23 and 2,76,942 employees in Q3FY22. While the sales and support count stood at 17,549 employees in Q3FY23 compared to 17,072 employees in Q2FY23 and 15,125 employees in Q3FY22.
Notably, the percentage of women employees inched up to 39.4% in Q3FY23 versus 39.3% in Q2FY23, however, edged lower from 39.6% in Q3FY22.
The company's revenue per employee on a consolidated basis declined to $54.2k in Q3FY23 versus $55.5k in Q2FY23 and $57.9k in Q3FY22.
In September 2022 period, Infosys hired more compared to its peers like Wipro, TCS, and HCL Tech for the second straight quarter in FY23. In Q2FY23, the company's net addition stood at 10,032 employees year-on-year.
However, compared to its peer TCS, Infosys has already made more hiring in Q3FY23 with the latest net addition. On the other hand, TCS reduced its workforce by 2,197 employees taking the total headcount to 613,974 by end of the December 31, 2022 quarter. Other peers Wipro and HCL Tech are yet to announce their Q3 earnings.
On the bottom-line front, Infosys posted a consolidated net profit of ₹6,586 crore in Q3FY23 -- registering a growth of 13.4% YoY and 9.4% QoQ. Meanwhile, revenue from operations came in at ₹38,318 crore in Q3FY23 increasing by 20.2% YoY and 4.9% QoQ.
In its financial audit report, Infosys said, strong Q3 performance with year-on-year growth at 13.7% and sequential growth at 2.4% in constant currency. Year-on-year growth was in double digits for most business segments and geographical regions in constant currency terms. Large deal TCV for the quarter was the strongest in the last 8 quarters at $3.3 billion. Digital comprised 62.9% of overall revenues and grew at 21.7% in constant currency. The operating margin for the quarter remained resilient at 21.5%.
The company revised FY23 revenue guidance to 16.0%-16.5%, while retaining operating margin guidance at 21%-22%.
