Capgemini to slow down hiring due to slower growth, reducing attrition

CEO, Aiman Ezzat in a call with analysts following the company’s results announcement for Q3 (the company follows calendar year) said that the company will slow down its hiring going forward because of slow growth and reduced attrition levels.

In India, Capgemini has a significant number of employees with over a lakh-and-a-half employees in the country. It doesn’t disclose a geographical breakdown of its employees each quarter.

The company announced its results for the third quarter on October 27, and said that they demand decelerating in the coming quarters. The CEO said that 2023 will be a year of growth, even if not as strong as 2022.

In September quarter the company added 6,300 employees, down from 11,400 the previous quarter. Capgemini’s total headcount was 3,58,400 as of September 2022.

Aiman Ezzat’s comments on hiring during the company's call with analysts come as Capgemini’s Indian counterparts too have reduced hiring after the pandemic-fuelled demand led to a war for talent. Net employee addition by TCS, Infosys, Wipro, and HCLTech was down 45 percent in the quarter ending September as compared to the preceding quarter.

He mentioned that as they are not growing much so it is normal to hire fewer people. Also he said that attrition is now moderating.

Capgemini’s attrition in Q3 was at 26.8%, down from 27% last quarter and 26.2% in Q1. In the year-ago period, attrition stood at 19.5%.

“We expect attrition to moderate further going forward as the demand environment and talent market are normalising progressively,” CFO Carole Ferrand had said

For India, Ezzat said that based on the resignations they saw in Q3, attrition in India in Q4 is coming down quite a bit. “We don't need to hire as much,” he said.

While the attrition is still “too high”, it’s a significant reduction from what the company has seen, he said.

The CEO said that they do not need to “over hire” and can start looking at some operational optimisation in utilisation and other areas.

“It’s an opportunity to tighten operationally…Most people [counterparts in the industry] have reduced significantly the hiring now because of the expected somewhat lower growth and of course reduced attrition,” Ezzat said.