More work, less pay @ TCS

The infotech leader, Tata Consultancy Services (TCS), said on Thursday that there would be no salary hikes for its employees next year. To cut costs, the company would also review the variable component in salary packages.

The company’s managing director and chief executive officer, S Ramadorai, did not rule out job cuts either if the business environment got worse. He told media here that TCS planned to increase the working hours of employees from 40 hours a week now to 45 hours from April 1. He said this was being done to better serve the company’s customers.

Ramadorai said, “The situation is so bad that one of our clients has asked for a 70 per cent price cut. We have told them of our inability to do so. In general, we have received a price reduction varying between four and 15 per cent. In this situation, we have decided to cut costs and increase our efficiency for long- term viability and sustainability.”

The variable pay component ranges from 20 to 35 per cent of gross salaries of the company’s 1,40,000 staff, and account for 8 per cent of its revenue. All lateral recruitments have been frozen except where urgently needed. Costs on other heads, including capital expenditure, are also being lowered.

The price pressure on TCS because of the global economic meltdown has also left an impact on the company’s recruitment plans. “We asked around 24,500 people to join our company in the next financial year. But we will take real- time decisions while recruiting them -- which means they will be inducted according to the need,” Ajoyendra Mukherjee, TCS vice- president and head of global human resources, said.

There is a bright spot in all this. TCS has been selected to provide IT services years for a suite of applications used by the Singapore Airlines group of companies, according to Girija Pande, head of TCS Asia Pacific.

Under the three-year agreement, TCS will continue to manage a significant portion of the airline’s IT systems, including 24x7 business critical applications ranging from passenger reservations to flight operations. The infotech company’s metrics-based management model and airline domain expertise will ensure make the airline more responsive to its customers.

Besides, its application rationalisation programme will help the airline minimise costs, reduce risks and increase business agility, Pande said.