TCS cuts staff salaries in tune with tough times (TATA)

[OhioChick]

Source: Economic Times India

30 Jan, 2008, 0230 hrs IST,S Srinivasan

MUMBAI: Tata Consultancy Services (TCS), India’s largest software exporter, is effecting a small across-the-board cut in employee salaries based on the company’s performance in the third quarter, a move reflecting caution amid tough times for the outsourcing industry. A top company official confirmed the move while stock market analysts said TCS is sending signals that revenue growth has not met internal targets and employees can’t expect a big wage increase this year.

TCS has clipped a portion of the variable pay linked to its performance, effectively reducing an employee’s salary by about 1.5% for the January-March quarter, TCS executive director and global human resources head S Padmanabhan told ET. “We undertake a review of variable pay every quarter and this time, we decided to make an adjustment,” he said. “We will revisit it in April.”

This is the first time in two years that the IT giant has reduced the variable portion linked to company performance. Mr Padmanabhan said the outsourcing sector faces macroeconomic challenges, which had to be factored in the quarterly review. The variable pay related to individual performance has not been touched, he added.

“This can send a strong signal to the employees that revenues have not measured up to internal targets,” a Mumbai brokerage analyst said. “The cut is small and is unlikely to attract a howl of protests, but employees will get the message that all is not well with the sector. Instead of giving them a shock at the time of annual salary review, the management has sought to lower their expectations of wage inflation through this small cut,” the analyst said.

TCS had reported a 5% quarter-on-quarter revenue growth and 6.7% rise in net profit for October-December, in line with market expectations. It had expressed ‘cautious optimism’ in the face of fears over a US slowdown and reasserted its ability to manage the rise in rupee’s external value.


Read more: http://economictimes.indiatimes.com/Outsourcing_woes_force_TCS_to_cut_salaries/articleshow/2741768.cms

[thunder rising]

1. Jeeez, those programmers must be down to $5 a day. And the code ain't worth more!

[OhioChick]

2. I've Seen Code From Them

That Isn't Even Worth That 5 Bucks!