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Meltdown virus bugs Kolkata

As part of cost cutting-measures to tackle global economic downturn,IT major TCS on Thursday said job-cuts are possible if the situation worsens but said there are no immediate plans for lay-offs.

Written by Press Trust Of India | Kolkata | Published: February 27, 2009 2:41:50 am

TCS says no fresh log-ins,pay packets to be rebooted

As part of cost cutting-measures to tackle global economic downturn,IT major TCS on Thursday said job-cuts are possible if the situation worsens but said there are no immediate plans for lay-offs.

The company has,however,ruled out salary hikes next year and frozen “lateral intake” besides increasing weekly working hours for employees.

TCS Managing Director S Ramadorai said,“There would be no hike in salaries in the forthcoming year” and added that “job cuts are possible if the situation worsens”.

Saying that the TCS has frozen “lateral intake”,he added that the company is reviewing variable pay components of the staff salaries. The variable pay component of TCS employees differs between 22 per cent and 35 per cent of his/her gross salary,depending on an employee’s rank,he said.

Variable pay represents eight per cent of the total revenue of TCS,whose headcount is 1.4 lakh. “We have around 140,000 on our payroll. On an average,20 to 35 per cent of an employee’s gross yearly salary is the variable pay component,” said Ajayendra Mukherjee,VP,Global Human Resources.

Ramadorai said the company is also looking into all aspects of cost reduction,including capital expenditure and infrastructure. “The environment is not as friendly as it used to be. All sectors in the country are facing a crisis and we are no exception,” said Ramadorai,who is also the CEO of the company that spends 54 per cent of its total expenses on manpower.

“If the situation remains unchanged,then we are not contemplating job cuts. But,if the situation worsens,then lay-offs are certainly a possibility,” said Ramadurai,adding that the judgment of efficiency levels of employees will now be very different from what it used to be.

The company also announced increase in working hours from 40 to 45 hours a week. According to analysts,the 12.5 per cent increase in working hours can add 625,000 billable hours for the TCS.

Expenses on communication and travel will also be curtailed,while the company will look at taking up more turn-key assignments. “We don’t want to be in the queue where we wait for payments. Many companies with whom we have worked in the past have filed for bankruptcy and payments are due,” added Ramadurai.

The CEO said 24,500 campus offers,where the students are expected to join in July 2010,will be delayed. “We have stood by our commitment for all the campus offers of 2009. However,for 2010,we have already sensitized the campuses and we will only be absorbing trainees on a real-time need basis. If situation worsens,a change in their pay package is also on the cards.”

Ramadurai also met Chief Minister Buddhadeb Bhattacharjee in the morning. “We discussed what IT companies like us can do for the state in terms of investments and social responsibilities,” said Ramadurai,adding though his company has stood by its commitment for the Rajarhat project,it might be delayed by a few months.

IT ministry offers I-T sops for soft power
The Ministry of Communication and Information Technology is in favour of extending the income tax benefits to units in the Software Technologies Parks of India (STPI) for another five years till 2015. Jainder Singh,Secretary of the Ministry,said this on Thursday while inaugurating the exhibition Indiasoft 2009,which has been organised by the Electronics and Computer Software Promotion Council.

“We have already taken up the matter with the finance ministry as we believe that the extension is important for the units,specially the SME sector,” Singh said.

On the cost cutting measures being adopted by many IT companies Singh said,“There is no need for reduction in salaries by the companies.”

“West Bengal has been a late starter in the IT sector but our growth rate has been better than the all India growth rate,” said Chief Minister Buddhadeb Bhattacharjee. He added that the state employed 80,000 IT professionals. “After sector V,Bantala and Rajarhat,we are now looking to expand IT hubs to Haldia,Durgapur,Kalyani,Kharagpur and Siliguri,” Bhattacharjee added.

He said the entire country had been hit by recession and it was time the central and the state governments got together to formularise strategies to cope with the meltdown.

Earlier,the income tax benefits under section 10-A and 10-B were extended till 2010 in last year’s Union budget from the scheduled 2009. The workforce in the information technology sector is expected to increase to 2.23 million from the current 2 million,Singh said. The employee strength is expected to rise by 15 per cent in 2009-10,he added. The growth of software export may,however,decline to 17 per cent from last year’s 28 per cent growth.

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