Is more layoffs planned by TCS at its UK centre?

Just a day after the report of India’s biggest software exporter TCS laying off several employees at its UK office, comes a report that the company has put another 130 employees under scanner.

According to a report in a business daily, the 130 employees are said to be working for its UK-based insurance client Legal and General’s (L&G’s).

In June 2008, TCS signed a five-year agreement with L&G to provide IT managed services. Under this, TCS was to provide application development and support services from the client's premises plus TCS' new delivery centre based in UK.

Earlier reports said that Mumbai-based TCS laid off most of its marketing team in London, plus a large number of professionals in the consulting division. According to sources, the targets were mainly the high-end consultants who are said to be an expensive lot to keep on the bench, and marketing.

Giving reasons for the over 100 layoffs in the UK office, TCS CEO & MD S Ramadorai said that either the contracts of these employees had ended, or can be due to bad performance. He added that going forward in the year, a lot of emphasis will be on employee efficiency.

This week, the IT major also accepted that it may go for further job cuts to tackle global economic downturn. The company also ruled out salary hikes next year.

Ramadorai said, "There would be no hike in salaries in the forthcoming year" and added that "job cuts are possible if the situation worsens".

Adding further that TCS has frozen "lateral intake" he said the company is reviewing variable pay component on employee salaries.

The variable pay component of TCS employees differs between 22 per cent and 35 per cent of his/her gross salary, depending on employee rank, he said.

Variable pay represents eight percent of the total revenue of TCS, whose headcount is 1.3 lakh. Ramadorai said the company is also looking into all aspects of cost reduction, including capex and infrastructure.

Unconfirmed reports also suggest that the company is planning to increase its working hours by 10-15 per cent over the current 40-hour, five-day week cycle.

Agencies