Tata Consultancy reviewing variable pay structure

February 26th, 2009 - 6:10 pm ICT by IANS  

Kolkata, Feb 26 (IANS) Information technology services and business solutions major Tata Consultancy Services (TCS) is reviewing the variable pay structure of its employees and could cut jobs if the slowdown worsens, a top company official said here Thursday.
“We are reviewing the variable pay component of employee salaries. At this point of time, we are not contemplating any reduction in any other component of the salary package but if the situation worsens then we have to take some action,” TCS chief executive and managing director S. Ramadorai said at a media conference.

Variable pay constitutes 8 percent of the company’s revenue and 20-35 percent of the employees’ cost to the company. It is linked to performance of individual employees as well as the company.

Asked whether TCS would consider retrenchment if the situation worsened, Ramadorai said: “We are not ruling it out. But as of now we don’t have any such plans.”

He said there was a 4 to 15 percent pricing pressure on the company following re-negotiation of new orders by clients.

“The environment is not as friendly as it used to be. There are genuine problems,” Ramadorai said, adding: “A client even asked for a 70 percent price cut, but we said we cannot do that.”

TCS has put on freeze lateral recruitment “except where we have an urgent requirement”.

The company has also decided to increase working hours from 40 to 45 a week from next financial year (2009-10), and curtailed travelling expenses. “We have requested employees to travel only when there is a need,” Ramadorai said.

Asked whether TCS has sacked 100 people in Britain, vice president and global head of the company’s human resources Ajoyendra Mukherjee said: “We have asked some people to go based on the yearly performance review but I cannot give you the numbers now.”

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