Hexaware Technologies not to recruit in Q3, Q4

Written by Rachana Khanzode | Mumbai, Jul 30 | Updated: Jul 31 2008, 06:03am hrs
Hexaware Technologies, the IT & BPO services and consulting company, said it is not recruiting people in the third and fourth quarter of the current fiscal. The companys global headcount at the end of the second quarter stood at 6,598, less by 329 people over the first quarter. The company, for the second quarter, reported revenues at Rs 284.4 crore, a 6.6% growth over the last quarter. Atul Nishar, executive chairman, Hexaware Technologies, said, We are not recruiting people for the coming quarters in this year because we want to increase utilisation. The employee utilisation for the second quarter is at 63.7% as against 66.2% in the last quarter, with an attrition rate of 24.3%. There might be some additions in the BPO segment but if there is a regular attrition happening, we are not keen on recruiting new employees for the IT business, he added.

According to analysts, this could be a sign of weak quarters coming ahead. An analyst from a research firm said, Stopping recruitment might be a possible step towards cost optimisation and employee utilisation but at the same, also indicates that the company is not expecting its volumes to grow. Another analyst added, Since there is not much clarity on the order books going ahead, we might see a weak third quarter for the company. The company recorded one time charges of about $3.15 million in the second quarter, of which about $1.5 million was paid as right offs for a customer related engagement. PR Chandrashekar, vice-chairman and chief executive, Hexaware Technologies, said, We were not doing work for one of our mid sized clients for about six months as they had challenges in terms of ability and willingness to pay and therefore, we opted for one time provisioning.

Hexawares revenues coming from the US also dipped to 61.9% in the second quarter from 66.1% in the last quarter. We have seen some delays in decision from our clients in the US, besides closure of some large engagements in this

quarter.