Attrition at Tata Consultancy Services (TCS) remained elevated at 19.7% in the quarter ended June 30 — a rise of 230 basis points sequentially. However, incremental attrition has moderated, company management said on Friday.
In the December 2021-ended quarter, attrition was 15.3%, up 350 basis points from the preceding quarter. In comparison, the rate of increase has slowed down, with the March quarter witnessing a rise of 210 basis points in attrition levels to 17.4%.
Rajesh Gopinathan, CEO and managing director, TCS, said the attrition this quarter also has a seasonality factor, as a number of junior employees of the company left for higher studies or other areas in this period of time.
However, Gopinathan said the attrition has not yet flattened or started to dip. “On an absolute basis it is continuing to increase though on a percentage basis it is starting to flatten and that may continue into part of Q2 also,” he said.
There could, however, be some meaningful moderation in the second half of the year. “In the medium to long term, the supply side and the demand side is easing up in terms of talent coming from outside of the immediate industry system and that should play into the moderation of the attrition cycle,” he said.
In the March quarter, Gopinathan had warned that reported numbers would get worse before getting better for the next couple of quarters because of the way LTM attrition is calculated.
In the April-June period, TCS added 14,136 employees to its rolls on a net basis. The total headcount stood at 606,331.
For FY23, the company has given a guidance of hiring 40,000 freshers, and for now has kept that guidance unchanged. However, Gopinathan said the company has built flexibility into its hiring system and depending on the demand, the number may move up or be scaled down.