30 March 2008

TCS:500 Jobs Cut after Recent Pay cut

Layoff sign of more trouble to follow for the IT sector?


If you have read this piece in the Times of India, then it would cause more worry.Now after cutting jobs,companies not giving offer letters!!
There is no denying the fact that the industry as a whole is seeing a down trend,so its natural that it will do everything to cut down on costs, which includes cutting down its bench strength, or its effective utilization.If you have offers from big IT cos, then don't worry, just be in regular touch with your HR.There have been cases, starting last year, when the joining dates of last year were delayed, so its advisable to keep one's options open.

What I read today was all about the above question.

After cutting down on variable pay across the board, Tata Consultancy Services has shown the door to 500 employees, citing poor performances as the reason. TCS is India’s largest private sector employer and Asia’s largest software exporter.

TCS however said that "Employees with experience of two years and above across the company who were unable to meet the performance requirements of our company are asked to look for other jobs commensurate with their abilities".It has been asserted that no employee has been sacked or fired.

As a policy the only time that TCS dismisses people is for disciplinary reasons.We might be reading too much into the lines, keeping in view the fact that the same no. of people leave TCS every year on similar grounds.TCS has added 7,522 employees in the third quarter ended December 31, taking the number of its employees to 108,229.

Earlier, TCS decided to reduce a portion of the variable pay linked to performance, effectively reducing an employee’s salary by about 1.5% for the January-March quarter.

Are we approaching IT sector slowdown 2.0?

The IT sector of India basically ailing from 2 facts:
  • Signs of a slowdown in the US economy, the largest spender on IT systems and outsourcing.i.e. Major clients may cut back their spending on technology and postpone upgradation.
  • The rising rupee viz-a-viz the US dollar building up the pressure on margins and revenues.For the uninitiated, all IT companies which earn their revenues in dollars and spend in rupees back home are at a huge loss.
IBM too has laid off around 700 entry-level trainee programmers across offices in India on the basis of performance. More IT companies are now looking at strict cost cutting measures. Salary hikes and bonuses are also likely to come down in the IT sector.

But this is only one side of the story.Optimists believe that the US recession might just help India in many other ways.With no immediate cut in IT budget of foreign companies, they will be looking at cutting costs, thereby creating more opportunities fir the Indian IT sector.
Our IT giants have done a great job up till now to maintain good profits by streamlining ways and adopting cost-effective methods, along with foray into new markets.The pay and Job cut strategy may be short-term and the industry as such remains bullish.

I think a slowdown would be too heavy a word to use at this stage, its more of a challenge, and I am sure our cos are up to it.For the recruits, its too early to worry, but they need to be better prepared, the sector might become a lot more competitive next year onwards!


  1. i believe that the IT sector is here to say and they will find ways to tackle this problem


  3. what will happen to the people joining TCS in 2008?will they be affected too??Please help...i'm very worried!!!!!

  4. wheh will be joining dates of tcs selected candidates finalized

  5. @ harish
    Don't worry, as of now,2008 batch is not going to be affected and the pre joining procedure is going on smoothly.

    TCS is currently conducting Medical checkups in various states including Delhi, and the offer letters will be released soon(they have been released for some states).The joining date is still anybody's guess, but the rumors of delay are baseless.

  6. i got offer letter from TCS long back, almost 1-1/2 year back of 2008 pass out batch, but still today i m waiting for joining date.

  7. I am selected in TCS in 2008 march in the Campus recruitment. When will I get the joining letter from TCS?

  8. Even i'm selected in TCS from 2008 batch...honestly speaking to you all...TCS is not gonna give the joining to is 2008 batch candidates....the story is over....!!!!!

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