Tata Consultancy Services – TCS to reduce salary, freez variable pay, increased the work hours, may layoff?

The slowdown is official at TCS – the country’s largest IT company now.This is according to TCS chief executive officer & managing director S. Ramadorai who has addressed the media in Kolkota.

Freez in variable pay

Tata Consultancy Services (TCS) may freeze variable pay to its over 1 lakh employees as part of a string of cost-management initiatives to cope with global meltdown. The variable component of a TCS employee’s salary is linked to three areas -

• the performance of the company
• the business unit of the individual
• the individual’s performance.

At present, it ranges between 20-to-35% of an employee’s gross salary. Comprising of distinct `company’ and `employee’ components, the variable allowance payment to each TCS employee happens on quarterly and monthly basis respectively, said a TCS official. More importantly, the variable pay increases with seniority. There are expectations that this may go down between a range 10 – 20% in the wake of current economic crisis. It may be noted that Manpower costs account for 53% of TCS’s total costs and the variable component is just about 8% of the revenue.
Increased working hours
The company has also decided to increase employee working hours from April 1, 2009, to 45 hours per week from the present 40 hours which means that every TCSer needs to clock each week.

Recalling employees from UK, USA.
It was reported earlier that TCS is recalling hundres of its employees from UK and USA in a bid to save dollar expense it is making on them.

Closing offices?

It is expected that TCS may close some of its offices in smaller countries to save infrastructure costs.

Layoffs at TCS is possible

Those who thought Tata are like government companies – you can work till you are retired may be wrong. Markets are the only movers at TCS and they may lay off if the need arises?

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