Amid rising inflation and economic downturn, Wipro announced its financial results for FY23 Q2. The company recorded poor performance this quarter, with profit plummeting 9.3% and 13% revenue growth, year-on-year (YoY). In the previous quarter, the profit was down by 21 per cent.
Jatin Dalal, chief financial officer at Wipro, said that it is simply a reflection of some of the operating margin changes, which are also being reflected partially in the net income line. “On a first-half basis, we had a much higher benefit on tax, which we had in Q1 of FY22, which is not there this year. That is also impacting the first-half performance of net income,” he added.
Throwing light on the devaluation of operating margin, Wipro chief Thierry Delaporte said that in the last nine quarters, they had grown 40 per cent as a company in a hot market amid high attrition. “I think it is the reality,” he added.
Meanwhile, on the hiring front, Delaporte said they had made the conscious decision to invest in freshers. “We have hired in H1 as many freshers as – actually, 75 per cent of the total number of freshers we hired last year over 12 months.” Wipro has onboarded 14,000 freshers in the first six months of FY22, with a net increase in headcount of 605 in FY23 Q2. However, this is low compared to the previous quarter, where the company added close to 15,446 employees.
He also said that they followed a strategy focussing on hiring freshers during the quarter and will continue to follow this strategy over the next quarter. At the earnings call, he also mentioned that they rolled out salary hikes and promoted 10K employees during the quarter.
Delaporte said these are the investments because we knew we needed them to continue to improve our operating model while being able to deliver and respond to the demand. He said that this quarter, part of the utilisation is impacted by the volume of freshers. “But we have continued to optimise our capacity and delivered a significant increase in the revenue without a significant increase in our headcount. It’s actually the mirror of what we had said a quarter ago,” added Delaporte.
Incidentally, Wipro was one of the few IT companies in India to have fired 300 employees over moonlighting. Wipro’s chairman Rishad Premji said that he stands by his comments on moonlighting being a violation of integrity ‘in its deepest form’.
Read: Indian IT takes Moonlighting Seriously
Attrition flattens, obsessed with freshers
Wipro’s attrition for the second quarter of FY23 stood at 23.8 per cent, compared to last year’s quarter, which was 20.5 per cent. The company’s voluntary attrition measured in the trailing twelve months for the quarter was at 23 per cent – a moderation of 30 basis points from the June 2022 quarter.
Delaporte said that the company would see a steady reduction in attrition in the coming quarters. “I believe that we have learned to adjust to a new world where some people are working from home, and some are working at the office,” he added, saying that they have really done a good job in connecting and engaging with its employees, being part of a group. “We have had our ‘employees all gathering’ at the campus every day, and that has certainly been driving a certain stabilisation of the attrition,” he added.
Saurabh Govil, CHRO at Wipro, said that onboarding freshers, engaging with them and showing them career paths for the next five years, both from a career and financial standpoint, has also helped stabilise attrition. “It’s three quarters in a row for us – a moderation. What we see in Q3 will be a further moderation and contraction of attrition,” said Govil.
