“The technology services industry, at some level, is recession proof,” Premji said at the company’s 76th annual general meeting on Tuesday. “In good times, clients spend on new initiatives and business transformation and serving customers digitally. They focus on reducing costs when times are not so good,” he said addressing a question on inflation concerns.
So far customers are making decisions, unlike in the 2008 financial crisis where the entire decision making stopped, Premji added. “As long as customers are making decisions, the IT services industry is, we feel, well placed to participate on cost- and revenue-side (of spends).”
This comes as the IT services sector is expected to see a sharp fall in revenue growth to 12-13% in FY23 from 19% in FY22, the steepest fall in eight years, according to ratings agency . The decline is due to tightening of IT expenditure by corporates amid the inflationary headwinds in the US and European Union.
The Bengaluru-based IT major has been managing attrition “pretty well” over the last few quarters as it has moderated and the downward trend is “comforting”, said the company’s chief executive Thierry Delaporte.
Wipro’s attrition is a result of a strong demand environment and the metric has moderated over the last couple of quarters, Delaporte added.
Discover the stories of your interest
“It (attrition) is not the biggest ever. We have known the peaks of attrition at different periods in our industry. It is not absolutely uncommon,” said Delaporte.
These comments resonate with IT companies indicating that the metric has been improving on a standalone quarter-on-quarter basis but the last 12 month numbers still remain high.
The company will focus on extending attractive career opportunities, financial benefits, reskilling and exposure to new technology, markets and clients to attract and retain talent.
“Attrition has been a reality for every company in our industry. Given the high demand driven from digital transformation and development of new operating models across industries, the demand for talent has accelerated the volume of attrition,” he added.
In the quarter to March, Wipro’s attrition was 23.8%, up from 22.7% sequentially and 12.1% for same quarter last year. The company is scheduled to announce April-June quarter results on Wednesday.
India’s largest IT firm
, however,
reported a higher attrition number on a trailing 12 months basis for the June quarter. Its attrition touched 19.7% compared with 17.4% in the previous quarter.
Wipro will also manage costs by reorganising the employee pyramid structure by inducting more freshers. It plans to hire 40,000 freshers—double of last year—in the ongoing fiscal.
Wipro also said it has no major capital expenditure planned in the country as it had just completed a large capex cycle for its development centres in India before the pandemic in March 2020. It will, however, create experience and innovation centres for customers in developed markets.
The annual general meeting was held virtually for the third straight year due to the Covid-19 pandemic
