Capgemini makes financial adjustments amid Covid-19
Capgemini has become the latest professional services firm in India to take cost-cutting measures aimed at mitigating Covid-19 disruption. According to news outlet Business Standard, the firm has reset all its employees’ accumulated leave to 15 for the second quarter this financial year.
Business Standard sourced its information from a Twitter forum with Capgemini employees, and spoke to the firm itself to get an idea of the extent of these measures. The firm reported that the new leave policy is very much a plan restricted to the second quarter.
“Our overall leave policy for the rest of the year remains unchanged and employees can continue to accrue leave according to the policy,” said the firm. Changes to the leave policy are accompanied by other cost cutting measures, which include deferred increments and promotions that are effective from after April 1st.
Those that took effect at the start of this month have gone ahead as planned, and the firm indicated that these increments cover more than 70% of the firm’s workforce in India. The remainder will see increments and promotions deferred by a quarter, a policy that many firms across the country are taking.
Many companies in the advisory sector have been driven to cost cutting measures at a time when third-party spending is being minimised across the public and private sector. The Big Four have already initiated several measures, which includes promotion deferments similar to Capgemini as well as partner pay cuts and other policies.
The advisory sector, much like several others, is not only trying to manage with a shrinking client pool, but is also adapting to the new working conditions that have emerged under Covid-19 circumstances. This includes managing ‘work from home’ arrangements, as well as initiating crisis response systems.
India has been in a nationwide lockdown since March 25th, and these conditions will persist until April 14th at the very least, as the government works to contain the spread of the virus. For many businesses, in the travel and hospitality sector for instance, the lockdown has been a huge blow to revenues.
Capgemini is among a number of IT-focused firms in India that still is able to perform key services for its clients in the digital sphere. While its managed services business runs as before (long contracts and critical IT support), the firm's consultancy portfolio has taken a hit as several clients have either put their projects on hold or canceled them altogether.
Notably, Capgemini has not explicitly stated that the current cost cutting measures are a response to this scenario, although that is the assumption being made by the firm’s employees on Twitter.
