For the first time in nearly two decades, Tata Consultancy Services (TCS) experienced a year-on-year reduction in its total headcount during FY24. The decline is part of a broader trend observed over the last three quarters, where the company’s workforce numbers consistently decreased from one quarter to the next.
As of March 31, the IT giant’s total workforce stood at 601,546, marking a decrease of 13,249 employees compared to FY23. This decline represents a significant contradiction from the previous year, which saw an increase of 22,600 employees and is even more pronounced compared to the net 103,000 employees in FY22.
Meanwhile, on a sequential basis, TCS’ headcount fell by 1,759 employees in the quarter ended March. This is in addition to a drop of net 6,333 employees seen in Q2.
However, the Mumbai-based company’s attrition rate saw a positive trend, decreasing to 12.5% in Q4 against 13.3% in Q3. Chief human resources officer Milind Lakkad said, “The reduced attrition at 12.5%, enthusiastic response to our campus hiring, increased customer visits and employees returning to the office have resulted in great vibrancy in our delivery centres and elevated morale of our associates”.
He further added that, while the 12.5% attrition number is already in the company’s “comfort zone,”…”I expect another 30-50 bps decline going forward.”
TCS’ attrition rate has seen a steady decline from its peak of 21.5% observed in the Q2 of fiscal 2023. This trend reflects that the job market is cooling off from the pandemic-induced digital boom, which has spurred aggressive hiring across companies.
While TCS and other IT companies were not backfilling attrition as they claimed to have enough people in their bench, Lakkad was optimistic about the company’s hiring strategy for FY25 and aspires to recruit 40,000 new freshers.
“We are the first ones to go to campus. We have already been to priority institutions and made offers. And right now we are in the middle of conducting a nationwide qualifying test, which will also give us significant numbers” Lakkad said in the TCS post-earnings press briefing.
The company had recently opened up its hiring portals for freshers across different categories – Ninja, Digital, and Prime — with the Ninja category offering a package of Rs 3.36 lakh per annum for different roles, while the Digital and Prime categories will offer Rs 7 lakh and Rs 9-11.5 lakh per annum, respectively. It plans to conduct a national-level test on April 26.
Further, the IT major has announced annual increments ranging from 4.5% to 7%, with top performers receiving double-digit hikes, effective from April 1. This decision follows last year’s substantial salary increases of 12-15% for exceptional performers.