Will now recruit 17,000 in the first half of next fiscal
Infosys Ltd has again deferred the joining dates of about half of the 35,000 employees it planned to recruit this fiscal because of a continued run of sluggish growth.
Last month, the IT major said that it would defer hiring of 17,000 new recruits by three months, but even this looks unlikely now.
It now plans to defer recruitment of 17,000 to the first half of next fiscal (2013-14). This will also affect the prospects of 6,000 campus recruits who will now be recruited during FY14.
The Bangalore-based IT major was expected to recruit about 35,000 employees, including 26,000 from campuses across various cities, this fiscal (2012-13). But the FY13 gross hiring could fall short of the guidance that they had given out in the first quarter this fiscal. Among fresh hires, the number will now be reduced to 20,000. However, onsite hiring will continue to be maintained at about 2,000.
As Infosys has slipped into the silent period ahead of its third-quarter results on January 11, its spokesperson referred to an announcement from the company in November this year which stated that there are no plans to reduce the total number of recruitments, though a part of the recruitments will be deferred by three months to January this fiscal.
An analyst with Axis Capital said the December quarter for Infosys will be muted. “The September quarter saw strong momentum in large deals and volume growth. However, momentum has not sustained in Q3 impacting new deal visibility,” the analyst, Priya Rohira, Executive Director, IT & Telecom, wrote in a note. Hence, hiring dates of campus recruits will be deferred, the analyst said.
Analysts with IDFC said for the company, supply of talent is not an issue, given the sluggish volume growth across the industry. However, improving utilisation from the current 72 per cent, excluding BPO employees and trainees, to a level of 76-80 per cent, remains a priority for the management.
“We believe the company would also take a relook at visibility, and a downward revision of organic growth guidance cannot be ruled out,” the IDFC analysts said.
An analyst with Tata Securities said they expect the company to miss its EBITDA margin guidance, given the pressure on revenue growth. He also said that in case the US fiscal cliff event happens, there is likelihood of clients delaying their calendar year 13 budget cycle or deferring their spending till clarity emerges.