TCS Crosses $7 Bn Revenue Per Quarter; 2k Employees Missing

Tata Consultancy Services (TCS) today announced its third-quarter results for FY23, reporting a 19.1% year-on-year jump in revenue and a 10.98% increase in net profit. As compared to the profits from the previous quarter, TCS reported a 4% growth QoQ.  The company crossed $7 billion in revenue per quarter. 

However, it also saw a negative 2000 employees in its total headcount in this quarter. TCS reported a total headcount of 6,13,973, which is less than the headcount TCS reported last quarter, i.e, 6,16,171; it’s down by around 2198 employees in total. 

Explaining the reason behind it, TCS said that they invested a significant amount in hiring fresh talent in the last two quarters. “We made a significant investment in hiring fresh talent last year, as well as the last two quarters of this year, and also in talent development of these people to make them productive now, and that investment is now being coupled with all the tightening”, said Milind Lakkad, CHRO at TCS, explaining that this resulted in a negative outcome. 

TCS Thrives on One Patent A Day 

One of the major highlights from the latest quarterly results was TCS getting to the total granted patents count of 2694. As per TCS chief Rajesh Gopinath, they are running on one patent day on a calendar day basis. “Today, we have 7134 patents applied, which is an increase of 738 on a year-on-year basis. Even more importantly, our total patents granted [have] now grown to 2694 patents, which is up to 493 patents on a year-on-year basis,” said Gopinath. 

Attrition trickles down, recession fear looms 

The attrition rate for TCS has almost doubled since last year, and this quarter it seems to be stabilising. TCS witnessed a minuscule decline in attrition rate from 21.5% in the previous quarter to 21.3% in FY23 Q3. However, last year in the same quarter—FY22 Q3—attrition was about 11.9%. 

Commenting on the recession, Gopinathan said that the current uncertainty is market specific, and the US should resolve itself very fast because we should know quite soon which way it is heading. About Europe and UK in particular, he was of the opinion that there is no uncertainty in the market. 

Strong Deal Pipeline

TCS expects a strong deal pipeline despite the recession fears with a focus on employing AI at cloud computing. Commenting on the deal pipeline, TCS COO N. Ganapathy Subramaniam said: “It looks really good. . . the pipeline has actually gone up in terms of medium to small deals as well as the large deal pipeline.”

Subramaniam said that cloud-related investments are a hot topic right now. “Everybody’s doing cloud-related investments, so much so that it’s actually a race to the cloud," he continued, “We’re also thinking on how we can employ machine learning, AI at the edge," giving them a feel-good factor.