CMC, AP Online (India) and MP Online are expected to be among the subsidiaries that will absorb TCS staff, a company executive familiar with the matter said on condition of anonymity.
TCS has put some 1,300 people, or 1% of its 1.3-lakh workforce, on the ‘watchlist’. The $5.7-billion software major will provide outplacement and counselling services to those who will not be absorbed by its subsidiaries.
In an internal email, the TCS management has asked all its units to raise the performance bar and optimize resources as most of its big-ticket clients are reeling under the global economic turmoil. “The process will result in some involuntary attrition. But the company is helping these employees with outplacement and finding alternate positions in subsidiaries if available or a fair exit,” the internal mail said.
Details like how many people will be absorbed by subsidiaries or which all companies will be hiring them could not be confirmed. A TCS spokesman refused to comment, pointing out it is the silent period ahead of company results.
Indian IT industry is caught in the global economic crisis as many multinational clients - particularly those in the financial services industry - have cut their IT budgets by freezing new investments and seeking discounts on existing contracts.
This forced Indian companies to initiate tough measures to protect their markets and margins.
TCS had recently decided to freeze variable pay and increase working hours from April 1, 2009.
Interestingly, TCS was one of the biggest recruiters in India Inc in 2008-09 when it added nearly 42,000 employees to its rolls. While some 20,000 were hired through campus placements , another 12,000 came with Citigroup Global Services (CGSL), the Citibank BPO that TCS bought for $505 million.
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