France’s Capgemini eases hiring due to tech sector slowdown
7:32 am Tuesday, February 21st, 2023
By Lina Golovnya
(Reuters) – French IT consulting group Capgemini on Tuesday forecast weaker revenue growth and said it would slow down hiring in 2023 amid a tech sector downturn.
The comments come as slowing growth, soaring inflation and a looming recession push tech companies including U.S. giants Alphabet, Microsoft and Amazon to slash jobs.
Capgemini’s shares were down 2.7% at 1048 GMT.
Capgemini, which offers consulting, digital, technical and engineering services, grew its workforce by 11% in 2022, reaching a headcount of 359,600 at the end of December. However, the number of staff rose just 0.3% from the end of September.
Chief Executive Aiman Ezzat said the group had slowed hiring in response to sluggish demand for cloud, data and artificial intelligence services.
“We are optimising our operation, taking advantage of the lower attrition and also factoring the fact that we have lower growth in front of us,” Ezzat told analysts in a call.
“(I’m) not going to do a prediction regarding headcount growth, but to see our growth in 2023, we’ll have to increase headcount,” he added.
Capgemini expects its 2023 revenue to grow between 4% and 7% in constant currency, compared with 16.6% last year.
Its annual revenue reached 22 billion euros ($23.48 billion) on bookings of 23.7 billion euros, an increase of 16.8% at constant exchange rates.
The Paris-based company also forecast 2023 operating margin in a range of 13.0% to 13.2%, and organic free cash flow of around 1.8 billion euros.
($1 = 0.9371 euros)
(This story has been refiled to remove reference to operating margin in second bullet point)
(Reporting by Lina Golovnya in Gdansk; Editing by Milla Nissi and Bernadette Baum)
