Capgemini posts quarterly revenue jump as it competes for workers

1 min read
The logo of Capgemini is seen at the company's headquarters in Paris

(Reuters) – Capgemini’s employee turnover is still higher than it would like as it competes for workers in a tight labour market, the French IT consulting company said on Thursday after posting strong quarterly revenue driven by its cloud and data activity.

“As we have a market with more demand than available talent, attrition rates are obviously higher than we are used to,” chief executive Aiman Ezzat said in a call with reporters.

Employee turnover over the past 12 months was 26.2%, Ezzat said. The 12-month figure stood at 23.5% in December.

Capgemini hopes to start seeing a decline in the figure by the end of the year but expects it will take two to three years before it is “normalised”, Ezzat added.

The high demand for IT specialists and shortage of available workers has left companies scrambling to attract new talent.

Capgemini, which offers consulting, digital, technical and engineering services, said it had expanded its workforce by 16,000 people in the last quarter, reaching a headcount of 340,700 at the end of March.

The group reported first-quarter revenue of 5.17 billion euros ($5.44 billion), up 17.7% year-on-year at constant exchange rate.

“This is the fourth consecutive quarter with double digit growth,” Ezzat said in a statement.

Bookings totalled 5.47 billion euros over January-March, up 26% at constant exchange rates compared with the same period last year.

“Overall, investors should be very pleased with the strong performance in Q1 and although FY22 guidance hasn’t been lifted, there is now more room for outperformance,” JP Morgan analysts wrote in a note.

Benefiting from a shift to cloud-based computing, Capgemini reported earnings that topped estimates for last year, though it warned that pressure for higher salaries and the cost of workers returning to the office would weigh on profits in 2022.

($1 = 0.9500 euros)

(Reporting by Valentine Baldassari; Editing by Subhranshu Sahu, Robert Birsel)