Attrition worries TCS, over 7,000 employees quit in Q1
By siliconindia   |   Monday, 19 July 2010, 15:12 IST   |    50 Comments
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Attrition worries TCS, over 7,000 employees quit in Q1
New Delhi: The attrition rate in IT services firm TCS shot up to a 13.1 percent during the first quarter of this fiscal. With the rise in attrition level taking a toll on the company, TCS is set to bring about a change in its human resource management. "Our attrition has gone up this quarter. Almost 7,000 left the company during the June quarter," said TCS Chief Executive and Managing Director N Chandrasekaran said. "But we have done a good job of retaining key performers," he added. Utilization of HR in Q1 stood at 82.6 percent (excluding trainees) and 74.85 (including trainees). The company added a net 3,271 employees during the quarter, raising the total strength to 163,700. "Given the strong deal momentum and continuing ramp ups, we have decided to increase the hiring target for the current fiscal to 40,000, an increase of 10,000 from the previous estimate," Global HR Head Ajoy Mukherjee said, adding "there are strategic exits. Our focus would be on retention, which is critical. This would be our top priority." The company reported a better-than-expected 24.25 percent jump in its June quarter profit at 1,906.07 crore. It said it is eyeing a strong demand for outsourcing services and is chasing 15 large deals across the globe. "In the first quarter we've already signed 10 big deals. And now we are looking forward for another 15 large deals in various sectors across the globe," Chandrasekaran said. The company had a net profit of 1,533.94 crore in the June 2009 quarter. Total revenue rose 14 percent to 8,217.28 crore in Q1 up from 7,206.99 crore in the year-ago period. "Our balanced growth was driven by disciplined execution and strong demand across markets and industry sectors. Our holistic growth across service lines highlights the growing traction among firms for our full service strategy," Chandrasekaran said. Reacting to the results, IIFL research analyst Rajiv Mehta said, "TCS reported numbers significantly ahead of our expectations. It posted a strong operational performance with 8 percent volume growth and marginal decline in operating margins. The growth is broad-based with all verticals and services growing in constant currency. Its revenue visibility has been boosted by multiple large deals wins in the quarter and the pipeline is also strong. We expect TCS to outperform in the near-term."

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