Wipro Holds Off on Campus Hiring Amid Headcount Decline and Efficiency Focus

Wipro, one of India's major IT companies, has decided to hold off on campus hiring despite experiencing six consecutive quarters of headcount decline. The decision comes as the company continues to onboard freshers from its post-Covid hiring spree and focuses on improving operational efficiency amid a volatile demand environment.

The company reported a 6.6% drop in revenue to $2.66 billion during January-March 2024, as enterprises start cutting IT spending. Wipro's revenue in the 12 months of fiscal 2024 fell 4.4% to $10.8 billion, with an operating margin of 16.1%. The number of employees at Wipro reached 234,054 in Q4 FY 2023-24, marking a decline in headcount for six consecutive quarters.

To address the challenges, Wipro is prioritizing the onboarding of freshers hired during the post-Covid period and focusing on improving operational efficiency. The company aims to increase its utilization rate to 86.9% and deploy benched employees first, rather than resorting to campus hiring.

Why this matters: Wipro's decision to hold off on campus hiring and focus on efficiency measures reflects the broader challenges faced by the IT industry amid a volatile demand environment. The company's performance and strategic adjustments provide insights into how major IT firms are navigating the current landscape and adapting to changing client needs.

Wipro's CEO, Srini Pallia, stated that the company is gearing up for a major technological shift, with artificial intelligence transforming clients' needs. Despite the challenges, Wipro maintains strong client relationships and provides excellent value for money. However, the company faced some difficulties in certain APAC countries and experienced a slight increase in staff turnover in Q4.

Looking ahead, Wipro has provided IT Services business segment revenue guidance for the quarter ending June 30, 2024, expecting revenue to be in the range of $2,617 million to $2,670 million, which translates to a sequential guidance of -1.5% to +0.5% in constant currency terms. Analysts noted that the company's recent change in CEO brings an additional element of uncertainty in the near term before a potential turnaround in the medium to longer term.

Key Takeaways

• Wipro halts campus hiring despite 6 quarters of headcount decline
• Wipro's revenue fell 4.4% to $10.8B in FY 2024, with 16.1% margin
• Wipro prioritizes onboarding freshers, aims to improve efficiency
• Wipro CEO says AI transforming client needs, faces challenges in APAC
• Analysts see uncertainty with new CEO, potential turnaround in medium term