TCS headcount falls for first time

Discretionary spending from clients is still under pressure and discretionary projects are sporadic, says Mr N. Chandrasekaran.

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Mumbai/Chennai, July 17 The headcount at Tata Consultancy Services was down for the first time in the first quarter ended June 30, as the company has put a near-freeze on hiring. It reported a net addition decline (in headcount) of 2,119.

“Our attrition level has remained similar to what it was in the previous sequential quarter. However, since we have controlled gross additions, the overall headcount has come down,” said Mr Ajoy Mukherjee, Vice-President, Head (Global Human Resources), at a press meet here to announce the results.

Attrition

TCS reported an attrition of 11.5 per cent, while making a gross addition of 2,828 employees during the quarter.

There was some respite for employees as the entire quarterly component of the variable compensation will be paid for the quarter.

During the last fiscal, 95 per cent of them were given 95 per cent of their variable pay (where the company’s quarterly performance is also a determinant).

At the end of the first quarter, TCS had an employee strength of 1,41,642; foreign nationals formed 8.3 per cent of the total base, while women accounted for 30 per cent.

The company has reiterated that it is on track for its hiring programme for this fiscal.

“We intend to honour all offer letters made. The first batch will start joining us in the current quarter and this will continue in a staggered manner throughout the year,” said Mr Mukherjee.

Campus offers

The campus offers made for the current fiscal totalled 24,885. TCS has made about 111 job offers to prospects for its development centre in Cincinnati, Ohio.

Of these, 99 have accepted offers, while 38 have joined. It may be recalled that with the help of tax rebates and grants from the Ohio State government, TCS inaugurated the centre in March, 2008. The project aims to create 1,000 jobs there over three years.

Discretionary spending from clients is still under pressure and discretionary projects are sporadic, according to Mr N. Chandrasekaran, Executive Director and COO, TCS. Discretionary spends are those that IT decision-makers in client companies decide on a continuous basis, using their discretion, as opposed to IT budgets for their companies fixed once a year.

Scope in fin services

In a call with analysts, Mr Chandrasekaran said that the banking and financial services sector offered more opportunities to offshore work. “Work on the BPO and integration front is available,” he said. Asked if decision-making cycles have changed since the last quarter, he said that the situation is not significantly different.

However, he said, compared to six months ago, the difference now is that management teams have changed (stabilised). “Everyone now knows the status, they have money to spend; they have cut whatever needed to be cut. But there aren’t too many projects on which decisions are waiting to be made. However, there are opportunities, in consolidation, for instance.”

Earlier, Mr S. Ramadorai clarified that the global economy continues to be weak and that TCS has still not ruled out surprises.