TCS plans to hire 50,000 staff this year

 

 

 

TATA Consultancy Services on Thursday announced a net profit of Rs 2,169 crore, up 32 per cent year-onyear, on sales that rose 25 per cent to Rs 9,286 crore, speeding past estimates and marking the company's first quarter with $2 billion in revenue.

A Bloomberg poll of analysts had forecast a net profit of Rs 1,990 crore on sales of Rs 8,850 crore.

TCS's revenue from North America alone crossed $1 billion. Infosys Technologies too had beaten estimates.

"We have had doubledigit volume growth across all our key verticals and geographies. This has driven the superior performance on the path to strong demand recovery," said N Chandrasekaran, CEO and MD of TCS.

The firm said operating margin at 28 per cent was a new high and it raised utilisation rate of employees, excluding trainees, to 83.8 per cent, a fresh high.

Dipen Shah, senior vicepresident ­ PCG research at Kotak Securities, said, "The 11 per cent volume growth was a positive surprise and so was the improvement in margins quarter-on-quarter.

The increase in hiring targets indicates higher business visibility."

Chandrasekaran said the utilisation rate could rise further to 85 per cent as it aims to respond to a recovery in demand with agility.

"We had said at the start of the year that we would be hiring 30,000 employees this year. But we have already hired as many in the first half itself. We expect to close the year by hiring around 50,000 employees and will hit colleges in November this year for campus recruitments," said Ajoyendra Mukherjee, head, global human resources, TCS.

Of the new hires around half are expected to be experienced staff and the rest are likely to be freshers. The company is looking at 11 large deals in the third quarter, said Chandrasekaran, illustrating the strong demand recovery and rosy outlook for infotech outsourcers. He forecast increased IT spend by clients next year.

Attrition at 14.1 per cent was about a percentage point higher than the July figure. "We are taking measures to control attrition, including promoting eligible junior employees once they complete two years rather than waiting for the end of the year. Line managers are closely examining career options for their teams too," said Mukherjee.

"In the quarter ended September 2010, we had a 103 basis points improvement in margins because of a favourable foreign exchange movement, a 54 basis points margin gain on account of lower intensity of selling, general and administrative expenses and a 95 basis points gain on account of an increase in productivity. This was partially offset by a 166 basis points increase in payroll costs on account of increased employee costs due to the effect of promotions and variable payout in the September quarter at 150 per cent," said S Mahalingam, chief financial officer.

Rupee fell against dollar, pound and euro by 1.8 per cent, 5.9 per cent and 3.5 per cent, respectively, in the quarter from the previous one. Mahalingam said in the current quarter rupee's exchange rate against the pound and euro was beneficial but no so against the dollar. "The rupee has appreciated by about four per cent against the dollar. We will have to deal with this and feel that we can manage margins at appropriate exchange levels," he said.

Chandrasekaran cautioned that the exchange rate was a big headwind for the current quarter. Macquarie said in a recent report that the company had done a commendable job of expanding operating margins by 3.1 percentage points in FY10 and has the greatest geographic dispersion including a focus on India.

 

NIIT Tech plans to hire 400 staff by next quarter

 

 

ANNOUNCING its Q2 results for 2010-11, information technology company NIIT Technologies said it would hire between 200400 employees by next quarter. It had taken on its rolls 409 employees during the last quarter, which was the maximum number of people it has ever hired in a quarter taking the total headcount to 4,994.

The company posted a net profit of Rs 43.5 crore for the second quarter ended September 30, 2010, up by 35.6 per cent as compared to corresponding period last year at Rs 32.1 crore.

"We would continue the hiring trend in the next quarter. We have also given wage hikes to our onsite employees, which accounts for 22 per cent of the total workforce by 3 per cent last month. This month, we are planning for a wage hike for rest of the workforce (offshore employees) in the range of 4-5 per cent," said CEO, NIIT Technologies, Arvind Thakur.

He said that the company saw a strong demand in the first half of the year, owing to a pent up demand from the slowdown. The company also got fresh intake of $60 million for three customers -two in travel and one in insurance space -and has an orderbook executable over the next 12 months of $141 million. To reduce the risk of currency volatility, Thakur said the company has hedged a total of $45.5 million at an average rate of Rs 43.46 a dollar for the next two quarters.

Consolidated revenue of the firm stood at Rs 324.6 crore, growing by 43.5 per cent, against Rs 226.3 crore in the same period last year.
The US contributed 36 per cent of the total revenues, followed by Europe, West Asia and Africa.

 

Infosys Technologies, To hire 40,000 in current year

Infosys Technologies, India's second-largest IT services company, has revised upwards its hiring estimate for the current financial year to 40,000 – up 11 per cent from the 36,000 projected earlier – as the company ramps up capacity to capitalise on emerging opportunities.

"We are revising our hiring plans, as we need enough bench strength to cash in new opportunities," T V Mohandas Pai, director (HR), said on Friday. The company will hire 11,000 people in the current quarter (October-December) as part of this plan, he added.

Infosys had an employee strength of 122,468 by the end of the second quarter, 16 per cent higher than the corresponding period last year. The company plans to reduce the utilisation rate to 77-79 per cent from 82 per cent as of now.

"We need to reduce the utilisation rate to have adequate bench strength for new projects," Pai said. On the attrition front, while 5,400 people left the organisation in the first quarter of this financial year, the number came down to 4200 in the second quarter — showing a decline of 22 per cent on aquarterly basis. "Attrition rate is expected to fall in the remaining two quarters of this financial year on the back of promotion opportunities for employees," Pai said. The company plans to promote 12,000 people in the remaining period of the year, he added.

However, the company pointed out that it would not have any impact on the operating margin, as the outgo had been factored in from the beginning of the year. "The total outgo for the company on the pay rise front due to promotions will be in the range of $78 million," Pai said.

Talking about onsite hiring, he said the company would hire around 1,000-1,500 people, out of the total 11,000 planned during the second half of this year. Infosys is also working on a 'talent management' programme to get feedback from employees for future policy making. "We are going to organise a talent workshop soon, which will have participation from all employees and they will give us feedback on present policies along with proposals for future enterprise," Pai added.

Ciber to hire 1,000 more by 2011 end

 

Firm, which has invested over $50m in India, is looking at tier-2 locations

NYSE-LISTED Ciber, a system integration firm, said it would double its headcount in India by the end of 2011.
The company presently employs around 1,000 in India.

Ciber, which has invested over $50 million so far in India, is looking at tier-2 locations across India for expansion. Recently, the company opened an office in Chennai with about 100 employees to serve its clients in automotive verticals.

Going forward, the company said it would have majority of its workforce in India, which presently is at the third place next to the US and the UK in terms of total headcount. During recession, the company hired close to 500 people in India.

Tony Hadzi, president ­custom solutions divi sion, Ciber, said, "Many of our local customers have some kind of tie up with the compa nies in the US or UK.
The present political rhetoric in the US on outsourcing will always be there and it was always. We invest more on virtual infrastructure to keep our employees close across the waters, and there is a significant cost benefit in it. In general, I do not think any political situation will deter our business model."

David Peterschmidt, CEO, Ciber, said, "I have met lot of CIOs who said that they no longer look at outsourcing to India as a low-cost option. India has some expertise that cannot be found in the US. Hence, outsourcing to India is not an economic decision, it is a decision premised on fundamental issue of talent and capability.
Our investment in India will continue and it will be in line with our expansion."

During second quarter of 2010, the firm reported revenue of $265.4 million.