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New Delhi: Tata Consultancy Services (TCS) will see a freeze in hiring experienced professionals and is set to suspend annual salary hikes globally, as reported by The Economic Times. The move comes just after it had announced that it plans to cut 12000 of its employees from its official payroll.
Simultaneously, the Tata Group company has also announced that it plans to bring strict internal policy for benched employees. The benched employees are those who do not work on any project.
These said employees will now be having a buffer period of 35 days to find a billable assignment or to leave the company. The clearing process for such employees has already begun in cities across Hyderabad, Pune, Chennai, and Kolkata.
The latest measures are part of the broader operational cost-cutting drive. The said move has been carried out citing conditions such as global trade wars, geo-economic conditions, and macroeconomic uncertainties.
Senior IT management opined that the mid- and senior-level layoff alone could have saved TCS $300-$400 million (Rs 2400 crore -Rs 3600 crore) in one financial year, which would have further led to the 100-150 basis point increase in the yearly margin.
The business daily reported that the TCS CEO has said that layoffs are set to be rolled out in a gradual manner.
The latest announcement has caused havoc in the IT sector, as it is one of the biggest layoffs in the sector.
The impact of the move could be seen on the IT giant's stock, as Jefferies, a global brokerage firm, has said the move is like a "canary in the gold mine" moment. The brokerage firm further said that the AI advancements are forcing the companies to take such measures.
In the last one year, TCS shares went down around 31 percent. Currently, TCS ranks among the weakest in the NIFTY IT Index. The shares were trading at Rs 3046 apiece at the time of writing this article.
