E-Paper
TCS warns of job cuts, pay freeze and less incentives
Top IT exporter Tata Consultancy Services has warned of more job cuts in 2009/10 in the wake of a worsening global economic slowdown, with no pay hikes for employees in the coming year, reports Jaidev Majumdar.
Top IT exporter Tata Consultancy Services (TCS) has warned of more job cuts in 2009/10 in the wake of a worsening global economic slowdown, with no pay hikes for employees in the coming year.
Managing Director S. Ramadorai told Hindustan Times the company has frozen lateral entries into the company and was also reviewing the variable pay component of its employees. Campus hiring will go on, but the pace is expected to slow.
TCS currently has 1.44 lakh employees on its rolls. The company has recently confirmed layoffs in the UK.
"Even job cuts are possible this year if the global economic situation worsens further and some people may even be asked to leave if they cannot improve their productivity,” Ramadorai said, while global human resource head Ajoyendra Mukherjee said variable pay was under review, signalling a possible cut in incentive pay.
The variable component accounts for 22-35 per cent of a TCS employee’s gross salary, depending on the employee’s rank. Roughly eight per cent of TCS’s revenues go towards this component, Mukherjee said. TCS expects to add 15,000-18,000 people to its workforce over the next 12 months, compared with nearly 8,700 in October-December, 2008.
Ramadorai said some contracts are being delayed or cancelled, but the company expects to achieve some earnings growth in 2009. TCS also intends to give a thrust on the government projects besides looking for ways to boost cost efficiency.
Ramadorai, who met West Bengal chief minister Buddhadev Bhattacharjee on Thursday, said that the company was keen to set up a special economic zone (SEZ) at Rajarhat in West Bengal, but its face would depend on signs of recovery.
Meanwhile, PTI reported from Bangalore that Singapore Airlines has extended its contract with TCS by three years. TCS would continue to manage a significant portion of Singapore Airlines' IT systems including 24x7 business critical application ranging from passenger reservations to flight operations, the software major said in a statement.
