TCS says more cost-cutting ahead

Source: ndtv.com
Speaking at the company's annual shareholders’ meet, Chairman Ratan Tata said its growth may be hit unless economic situation improves and it will take further cost-cutting measures in this fiscal. Tata Consultancy Services expects lower or no growth in the foreseeable future as the IT industry battles the difficult global conditions, he said.

To adjust to the changing scenario, he said, TCS would look offshoring more jobs as part of revamping its business structure.

Forecasting low growth for IT sector, Ratan Tata pegged FY10 capital expenditure of TCS at Rs 1,300 crore. On the passport project, he said that the pilot version would be ready by October. Well, Tata is walking a tight rope as he finally admits to shareholders that next few quarters wouldn’t be good.

The slowdown in growth will force TCS, India's largest tech firm, to fall short of its target of achieving $10 billion in revenues by 2010. Ratan Tata, chairman of Tata Sons, said, "Expenditure on it is expected to be down due to slowdown."

Well, Ratan Tata not only came up close and frank with his investors, but also signaled that TCS was now ready for a complete recast for the company's business model.

This candid talk comes two months ahead of the retirement of the current CEO, S Ramadorai, leaving the new boss N Chandrashekharan, the task of radical changes. Meanwhile, Tata has set the tone not just for TCS but also for the industry. His tone was extremely bearish. Meanwhile, for TCS of course, there is a change of guard at the top. Both the company and the shareholders hope that younger hands will make a difference to their fortunes as well.