Bucking the trend of sequentially dropping headcount at large-cap IT companies, Infosys added 5,043 employees to its workforce in the December quarter.
According to the company management, the headcount increase can be seen as an indicator of improving demand environment. “It demonstrates we have confidence in where the market is and what we are seeing in it terms of the demand.
And that feeds into how we are raising the growth guidance,” Managing Director & CEO Salil Parekh said.
During the quarter, Tata Consultancy Services (TCS) saw its employee base drop by more than 11,000, while HCL Technologies reported a reduction of 261 employees.
What did Infosys CFO say?
Infosys CFO Jayesh Sanghrajka said the headcount growth at the IT major also factors in the addition of freshers. Infosys had set a target of 20,000 fresher additions for FY26 last year.
“We have onboarded roughly around 18,000 freshers and are well on our way to achieve the 20,000 number this year. This reflects on our headcount also because many are under training. Our utilisation, including trainees, has come down. That is our investment into building capacity for the future,” he said.
Utilisation levels declined to 80% (Q2: 82.2%) and 84.1% (Q2: 85.1%), including trainees and excluding trainees, respectively.
This is also contrary to some analyst views that utilisation levels would continue to be in the mid-to-high 80’s as the incorporation of AI and automation forces IT companies to decouple delivery models from headcount growth and bench strength.
Though HCLTech and TCS did not disclose their utilisation numbers, industry experts put them in the mid-80’s for the past few quarters.
Attrition at Infosys came down sequentially by 200 basis points to 12.3% (Q2: 14.3%). TCS saw attrition rise to 13.5% (Q2: 13.3%), while at HCLTech, it decline marginally to 12.4% (Q2: 12.6%).
Sanghrajka further said Infosys finished one wage hike cycle, which was in two parts–in January and April–and is yet to decide on the next part/cycle.
Visa Dependency Outlook
On H1B applications and dependency, Parekh said the firm is continuing with the process since there is an existing set and will examine the need for fresh applications as and when the need arises in the future. In the meantime, he added that the firm continues to service the market with a mix of its workforce in the US and India.
“Our approach is very clear. Majority employees in the US do not have visa requirements,” Parekh said.
On-site workforce deployment reduced marginally to 23.1% (Q1: 23.2).
On the news of some Indian nationals being deported from the US, Parekh said, “No Infosys employee has been apprehended by any US authority. A few months ago, one of our employees was denied entry and sent back to India.” He refrained from commenting when asked if Infosys plans to take any action regarding the employee who was sent back.