Wipro said it was closing its offices for four weeks due the Omicron variant of COVID, and said it would add 30,000 fresh graduates in the year starting in April.
“The safety of our employees remain our top most priority,” said CEO Thierry Delaporte.
“With the rapidly spreading Omicron variant of the COVID-19 virus, we remain very vigilant. So, as a proactive measure, we have decided to close our offices globally for the next four weeks.
“It is of [] to us that 90% of our employees globally are now vaccinated with 1 dose, and over 65% are fully vaccinated with the recommended two doses.
“Our plans to return to office, even in a hybrid model for fully vaccinated employees, will be calibrated in the context of the evolving situation, keeping both our employees’ safety and client preferences in mind.”
For the third quarter, Wipro reported revenue largely in line with analyst estimates, but its profit missed expectations.
The company’s gross revenue for the quarter was Rs 20,310 cr, up nearly 30% on year and 3.3% compared to the preceding quarter. This was in line with analysts’ expectations. The growth was 3% sequentially in terms of constant currency.
However, the company’s profit missed Street expectations quite significantly.
While the Street was expecting net profit to rise by around 6% on quarter, the company’s net profit actually increased by only 1.3% on quarter to Rs 2,970 cr.
The outlook for the final quarter of the financial year came in line with expectations at 2.-4% on year.
“We do not see any fundamental change in the market, and the market continues to be strong, otherwise we would not have had such a strong quarter on bookings,” said the CEO on the guidance.
ATTRITION
The company said it is worried about attrition, but expects it to moderate in the final quarter.
“There’s a big gap between supply and demand, We anticipate that it will take a few quarters for things to stabilize,” said Saurabh Govil, who heads the company’s human resources operations.
He added that the company will add “70% more freshers” in the current financial year compared to last year, and 30,000 fresh graduates in the year starting April (FY23).
The company had said it would onboard 17,500 fresh graduates this year. The company has already onboarded 17,000, implying that only a few more would be onboarded in final three months of the financial year.
The miss on the margin was likely related to the sharp increase in employee remuneration seen in the IT services industry in India.
Most IT employees have multiple job offers in hand, and companies are having to offer as many as three raises a year to retain talent.
Between October and December, the company said it had done a second round of salary increases for most of its employees in the current financial year. It has also given promotions for employees every four months.
Given the situation, the company said it was not disappointed with the margin performance.
“We delivered robust operating margins after absorbing substantial investments on salary increases, owing to continued improvement in operating metrics.
“We also improved our working capital, by reducing our Days Sales Outstanding. This has resulted in strong operating cash flow conversion, of 101.3% of net income. Additionally, we have declared an interim dividend of ₹1 per equity share,” it said.
