French IT giant Capgemini Jan-Mar consolidated revenue fell by 3.5% on-year to 5.53 billion euros (approximately $5.9 billion) due to sluggish demand for technology in the North American market and the financial services sector. The topline in Q1 FY24 also fell below 5.62 billion euros reported in Oct-Dec. The company operates on a January to December financial year.
Geographically, Capgemini experienced revenue declines across all regions, with the revenue in North America, the company’s second-biggest market making up 28% of its sales, fell 7.1% against a decline of 6.6% in the Q4 of 2023.
The UK and Ireland region saw a 3.2% decrease on the year and the Rest of Europe region remained relatively stable with a minor 0.5% decrease in revenues. Meanwhile, the sales from financial services fell 7.3% on a year-on-year basis, while manufacturing and consumer goods and retail fell 1.5% and 3.8%, respectively.
The IT company’s order bookings also fell by 3.5% to 5.66 billion euros in the quarter. Further, the company’s workforce fell to 337,200 in the March quarter, down from 357,000 a year prior. Further, the offshore workforce, primarily based in India represents 57% of the total, fell to 192,000 employees against 207,300 employees in March last year.
Additionally, Capgemini reiterated that it expects its sales to be flat or grow by up to 3% this year. CEO Aiman Ezzat said “As anticipated, the market continued to slow down in Q1, but we confirm the growth trough is now behind us. We expect the market to gradually pick up toward an attractive exit growth rate in Q4, setting up for a more tangible acceleration in 2025.”
Ezzat highlighted the strong demand for large-scale digital transformation projects and the company’s focus on operational and cost efficiency. He also mentioned the launch of a new generative AI platform aimed at enabling clients to experiment with and industrialize industry-specific use cases at a controlled cost.
This announcement follows subdued revenue forecasts from leading Indian IT companies for FY25, reflecting broader sector challenges. Infosys, India’s second-largest IT services provider, revised its FY25 revenue growth projection to 1-3%, while HCLTech expects a 3-5% increase. Wipro anticipates a revenue change between -1.5% and 0.5% for Q1 FY25.