TCS announces salary hike for employees, attrition at all-time low of 8.9%

IT major Tata Consultancy Services kicked off the earnings season for the July-September quarter (Q2) by announcing salary hikes from October 1. Rajesh Gopinathan, MD and CEO of TCS, said that the salary hikes for employees will be worked out in the next few weeks, but will broadly be in line with what the company did in the previous year. In April, soon after the lockdown, TCS had announced that it was freezing salary hikes.

TCS reported a 7% year-on-year decline in net profit at Rs 7,475 crore.

Additionally, the Board approved a share buyback of up to Rs 16,000 crore at Rs 3,000 per share. This would be at 9% premium of its current market price. This would be 5.3 crore equity shares of TCS, which is 1.42% of the total paid up equity share capital.

In terms of manpower, TCS saw an addition of 9,864 people, and the firm’s attrition was also at an all-time low of 8.9%. Women constituted 36.4% of the workforce, TCS said.

“We are happy to announce that we will be rolling out salary increases, effective October 1st. We started onboarding freshers, and increased our recruitment globally in Q2, in anticipation of the growth trajectory we see ahead,” Milind Lakkad, Global Head, Human Resources said in a statement.

On the recent cut back of H-1B visas and tightened wage-based entry barriers announced by the Trump administration, Milind said that it is too early to comment on it, and that TCS’ teams are going through documents. However, he reiterated that TCS’ business model is strong enough to withstand these challenges.

In terms of business segments, the company saw a strong growth in the Banking, Financial Services and Insurance sector (BFSI) and the Retail sectors saw the strongest growth recording 6.2% and 8.8% respectively. Life Sciences and Healthcare sectors grew 6.9%, Technology & Services grew 3.1%, Manufacturing 1.4% while Communications & Media de-grew by 2.4%.

In terms of geographies, TCS said it saw growth in North America, UK and Continental Europe. In terms of its emerging markets, TCS said India grew 20%, MEA by 8%, Latin America by 5.5% and Asia Pacific by 2.9%.

For the EPIC Systems case, TCS provided Rs 1,218 crore {US $165 million) as an exceptional item.

Rajesh Gopinathan said that they are confident about the future.

"What we are witnessing right now is the start of the first phase of a multi-year technology transformation cycle. In the current phase, enterprises are building a cloud-based foundation that will serve as a resilient, secure and scalable digital core. In subsequent phases, we will see the native capabilities of these platforms being utilized to create innovative new business models and differentiated customer experiences,” he said.