TCS asks several employees in UK office to leave

BANGALORE: India’s biggest software exporter, TCS, has asked several employees in its UK office to leave, as the company prepares to trim its

Top Indian outsourcing cos Nine trends for IT in 2009 Cities that are IT hubs

payroll costs and cope effectively with the recession by moving more roles and delivery functions to offshore locations such as India.

As customers tighten their IT budgets and demand more projects be executed offshore for cost savings, tech firms such as TCS, Wipro and Infosys are seeking to cut back their onsite staff anywhere between 5-10% in the first phase of rationalising their costs.

“TCS just laid off most of their marketing team in London, plus a large number of professionals in the consulting division,” said a UK-based expert familiar with these layoffs.” It seems the target is mainly the high-end consultants who cost a lot to keep on the bench, and marketing,” he added on conditions of anonymity.

While ET could not independently ascertain the exact number of professionals being asked to leave, the UK-based expert said the number of impacted professionals could be above 100.

When contacted by ET, a TCS spokesperson confirmed the layoffs.

“In order to stay competitive and drive internal efficiency in a difficult operating environment, TCS UK has decided to optimise its operations. This has resulted in some involuntary attrition affecting fewer than 1% of our UK workforce,” said a TCS spokesperson when contacted by ET on Wednesday. “This will not affect customers and they will continue to receive the high level and quality of service they have come to expect from us.”

TCS serves customers such as British Airways, BT and United Utilities in the UK. The company has around 4,800 professionals working at almost 65 customer sites in UK and Ireland.

Leading outsourcing customers such as GE and Bank of America plan to increase their offshore outsourcing in order to lower their cost of managing IT in the US and UK, where billing rates are more than half of what can be achieved by sending work to offshore locations such as India. “An onsite resource is thrice as costlier as an offshore professional, so there is an obvious push to move more roles to cheaper locations,” said a senior executive at a top Indian tech firm who did not wish to be identified. Meanwhile, as reported in ET few weeks ago, customers such as Royal Bank of Scotland (RBS) have been pushing more work offshore, and are asking their vendors including Infosys to bring down the cost of delivering projects.

Over past few months, RBS has brought down the number of onsite staff in UK by almost one third, and has relocated many positions at its Indian captive centre. RBS did not respond to an email query sent by ET a month ago. Infosys too did not respond to an email query sent on Wednesday. Meanwhile, Wipro corporate VP, HR, Pratik Kumar said, “Whenever such opportunities arise, we explore moving roles offshore, but these are client-agreed movements.”