Mindtree sees nearly a quarter of its workforce leave
The Bengaluru-based firm posted 23.8% attrition as the software industry is witnessing an all-time high attrition on the back of a post-Covid talent-war sparked off last year.
- Apr 18, 2022,
- Updated Apr 19, 2022 9:59 AM IST
IT major Mindtree on Monday reported more than 20% twelve-month attrition for the full financial year 2021-22, following in the footsteps of larger peer Infosys as the software industry is witnessing an all-time high attrition on the back of a post-COVID talent-war sparked off last year.
The Bengaluru-headquartered firm closed the 2021-22 financial year with 23.8% attrition, according to its results declared on Monday. The figure is an increase from the 21.9% reported in the previous quarter, and a jump from the 12.1% seen at the end of the previous financial year.
“Our industry-leading growth through a year of rapid business and technology shifts demonstrates the relevance of our value proposition in reimagining businesses and driving digital transformation at scale,” said Debashis Chatterjee, Chief Executive Officer and Managing Director, Mindtree.
Three months ago, Chatterjee had said that he did not expect the attrition situation to change over the next couple of quarters.
Last week, IT bellwethers TCS and Infosys posted 17.4 per cent and 27.7 per cent attrition, respectively, for the fourth quarter.
On a net basis, Mindtree added 10,666 software employees in FY22, taking the total count to 33,206. Its standalone employee costs increased Rs 1,214.6 crore to Rs 6,327.8 crore during the just-concluded financial year.
TCS and Infosys have also seen their employee expenses go up by Rs 12,051 crore and Rs 6,485 crore, respectively, during the financial year. The expense head usually includes costs in the form of transport facilities, health insurance benefits, learning and development modules, among others.
“We expect margins to contract on-quarter despite the industry continuing to add record freshers. The attrition across companies would continue to be high and, hence, cost to backfill attrition (at higher costs) and costs related to retention, bonus, rationalisation of compensations are expected to put pressure on margins,” brokerage firm ICICI Direct had said in a note.
Global brokerage firm Nomura had said that while the robust demand outlook for the sector remains intact, headwinds like high inflation in developed markets forcing higher-than-usual salary hikes for onsite employees, resumption of travel and higher visa costs would only be partly negated by tailwinds like improved pricing and currency depreciation.
Mindtree reported a 49 per cent year-on-year rise in consolidated net profit to Rs 473.1 crore for the quarter ending 31 March, 2022, on the back of robust demand and aggressive customer mining. The company had posted a net profit of Rs 317 crore in the same quarter last year.
(CORRECTION: The story erroneously mentioned Q4, while the attrition rate was for the full financial year. It has since been corrected.)
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IT major Mindtree on Monday reported more than 20% twelve-month attrition for the full financial year 2021-22, following in the footsteps of larger peer Infosys as the software industry is witnessing an all-time high attrition on the back of a post-COVID talent-war sparked off last year.
The Bengaluru-headquartered firm closed the 2021-22 financial year with 23.8% attrition, according to its results declared on Monday. The figure is an increase from the 21.9% reported in the previous quarter, and a jump from the 12.1% seen at the end of the previous financial year.
“Our industry-leading growth through a year of rapid business and technology shifts demonstrates the relevance of our value proposition in reimagining businesses and driving digital transformation at scale,” said Debashis Chatterjee, Chief Executive Officer and Managing Director, Mindtree.
Three months ago, Chatterjee had said that he did not expect the attrition situation to change over the next couple of quarters.
Last week, IT bellwethers TCS and Infosys posted 17.4 per cent and 27.7 per cent attrition, respectively, for the fourth quarter.
On a net basis, Mindtree added 10,666 software employees in FY22, taking the total count to 33,206. Its standalone employee costs increased Rs 1,214.6 crore to Rs 6,327.8 crore during the just-concluded financial year.
TCS and Infosys have also seen their employee expenses go up by Rs 12,051 crore and Rs 6,485 crore, respectively, during the financial year. The expense head usually includes costs in the form of transport facilities, health insurance benefits, learning and development modules, among others.
“We expect margins to contract on-quarter despite the industry continuing to add record freshers. The attrition across companies would continue to be high and, hence, cost to backfill attrition (at higher costs) and costs related to retention, bonus, rationalisation of compensations are expected to put pressure on margins,” brokerage firm ICICI Direct had said in a note.
Global brokerage firm Nomura had said that while the robust demand outlook for the sector remains intact, headwinds like high inflation in developed markets forcing higher-than-usual salary hikes for onsite employees, resumption of travel and higher visa costs would only be partly negated by tailwinds like improved pricing and currency depreciation.
Mindtree reported a 49 per cent year-on-year rise in consolidated net profit to Rs 473.1 crore for the quarter ending 31 March, 2022, on the back of robust demand and aggressive customer mining. The company had posted a net profit of Rs 317 crore in the same quarter last year.
(CORRECTION: The story erroneously mentioned Q4, while the attrition rate was for the full financial year. It has since been corrected.)
Also Read: E-bike catches fire at Okinawa showroom in Tamil Nadu, firm issues statement
Also Read: Second Global COVID-19 Summit to be held on May 12