BENGALURU: The country’s largest IT services company Tata Consultancy Services (TCS) has recently revised hikes for its employees who have completed one year. Accordingly, lateral hires with anniversary date of April 1, 2022, or after will not receive a letter or increment on completion of the first year.
In a letter to its employees, which TNIE has seen, TCS said, “There has been a recent revision in TCS policy around the first anniversary... The first increment will be at the subsequent annual increment cycle.” This comes at a time when all major IT firms are facing intense margin pressure. Recently Infosys cut 30% of the average variable pay on margin pressure. Wipro too has held back variable pay. However, TCS said it will payout 100% variable pay for its employees.
Nascent Information Technology Employees Senate (NITES) strongly condemned TCS decision to stop increments and appraisals of newly-joined employees for one year. “The company is unethically revising the policies related to employees remunerations without any consent from labour ministry. At the time of recruitment, the company promises to pay a definite salary to employees but later amend policies without even talking to employees,” said Harpeet Singh Saluja, president NITES.
In a statement, TCS said it always had increments in line with industry benchmarks. “Even during the pandemic, we ensured our increment cycles were unaffected. It is incorrect to suggest otherwise. All experienced hires will be given an increase as part of the annual salary appraisal that follows their one-year anniversary,” TCS said. A top executive from a staffing firm said many IT firms have overhired and these firms’ margins are under pressure so now they are trying to save money as the demand environment doesn’t look too good in the coming quarters.
Meanwhile, Xpheno, a staffing firm in its recent report said that the IT services sector had its sharpest YoY drop of 23% in active jobs volume in August 2022 compared to August 2021.