Paul Obrecht: Hi, thanks. It’s Paul Obrecht on for Darrin. Could you touch on the demand trends you’re seeing across end markets? It looked like energy continued to decelerate while automotive declined year-over-year for the first time in quite some time, so I’m curious on what client engagement looks like across the segments and what the expectation is going forward through ’24.
Guo Xiao: Sure, so as you point out, performance across our industry verticals was down in Q4, reflecting the challenging macro environment, including auto, I think the most resilient vertical for us. But I’ll go through most of them – from the tech retail sector perspective, we continue to see further pullback of spending as our clients go through tight budget cycles. We’re still seeing some of them even doing layoffs at this point. Financial services is relatively stable on the whole, and it’s also an area we’re going to focus on. We are seeing some budgets opening up in this vertical, especially in Asia Pacific, especially in the Australia market. Energy and public healthcare is a strategic focus for us as they are more resilient from a recession perspective, and then we also continue to see growth opportunities from our clients in this vertical, especially I’m going to call out life sciences, where we’re seeing a lot of exciting opportunities in that sector.
This is now 25% of our portfolio, this vertical. So auto, travel, transportation, even though it’s declining year-on-year, a lot of this is due to the pricing pressure I mentioned earlier, but it’s still our most resilient vertical and we are very much focused on driving growth from that sector.
Paul Obrecht: Thanks, that’s really helpful. Then as a follow-up, how are you thinking about headcount this year? I know total employees declined notably the past two quarters, and I guess the question is in the event of a demand rebound with easing client budgets, what changes would be needed on the supply side to meet this demand? Then I guess somewhat related, what has been the internal response to these restructuring efforts?
Erin Cummins: I’ll start with headcount. On the whole, we are seeing right now our voluntary attrition outpace the hiring, and that’s likely to continue for another quarter. We are hiring; however, we have a very strong recruiting capability, we have a very, very strong employer brand, and so we continue to hire in select pockets, particularly in geos where we’re more sold out or for skill sets – I mentioned data earlier, where we continue to see strong demand. On the whole, even though total headcount is coming down somewhat, we are continuing to hire and we have a high degree of confidence in our ability to hire when demand rebounds, so feeling fine about that, particularly. I would just touch on the restructuring and how employees are feeling.
Certainly 2023 was a challenging year across our business, but we have an open dialog with our employees, we’re focused on being in person where we can and just helping people understand what we’re doing, why we’re doing it, and that really has been our key focus. It’s part of the values that we have across Thoughtworks, and we think that is important and resonating well. Then positively, some of the changes we’re seeing from the restructuring are starting to come through, so we’re going to keep the dialog going. We think that’s a critical part as we go through this change process, and then we believe very much in the restructuring and we know that the outcomes will help make people be confident around what we’re doing, so on the whole, going okay.
Paul Obrecht: Got it, thank you.
Operator: Thank you. At this time, I’d like to turn the call back over to Xiao for any closing remarks.
Guo Xiao: Sure. I want to reiterate that digital transformation is a long term strategy for most companies, our clients, and Thoughtworks differentiates ourselves through technology excellence, over 30 years of thought leadership. We believe that we’ll continue to differentiate in areas like cloud, platform, data, gen-AI, customer experience and product, and at the same time we’re also diversifying our business to address more of our clients’ urgent needs, for example in enterprise application modernization and DAMO. Despite some year-to-year fluctuation, we believe our tech trends and these investments will position Thoughtworks well to drive steady growth in the long run. With that, I want to thank you for joining our earnings call, and I would like to acknowledge the continued support of our board and shareholders. Stay well, and we look forward to catching up with you next quarter. Thank you.
Operator: Thank you for your participation. This does conclude the program and you may now disconnect. Everyone have a great day.
