Monday, February 11, 2008

TCS to hike pay by 15%, starts 2nd Hyd centre

Software giant Tata Consultancy Services (TCS) will increase the salary of its employees by close to 15% this year in spite of the reported cost cutting measures, including a cut in variable pay, by the company. And, the usual pay hikes to its employees this year also would not mean any compromise on the company's overall profit margins.

Terming the company's ongoing operations as 'business as usual', TCS chief executive officer & managing director S Ramadorai today said either the company's move to ask some of its employees to find placements elsewhere on performance grounds or a cut in variable pay was nothing new in the company except for the fact that the media flared them up this time giving a different interpretation.

"The performance management is an ongoing process. These 500 people left the company on performance grounds over a period of 10 months. But the media interpreted the move as if it had happened overnight or in a week," Ramadorai said while stating that the figure was not even worth talking about considering the attrition rate or recruitment that had happened in the same period. The company this time has selected 22,000 people through campus recruitment, he said.

While stating that they are aware of the US economy slowdown and its implications, Ramadorai, however, said there had been no impact of the US slowdown on the company's business operations so far. "We are not saying that there will not be any implications from the US slowdown. But we are optimistic about the long-term sustainability of the company," he said in response to a question on any immediate impact of the same.

According to S Mahalingam, chief financial officer, TCS, the company would leverage internal efficiencies, including cost management, to sustain the growth in salaries while maintaining the profit margins, which are around 26% before taxes for the company.

The company today formally inaugurated the Synergy Park, its second campus in Hyderabad, which would accommodate 8,000 people after it is fully developed. The first phase of the project, which is now operational took an investment of Rs 250 crore and accommodates 2,700 professionals. The second phase, which is expected to begin in April this year, involves investment of another Rs 500 crore. The company currently employs about 6,000 people in Hyderabad.


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