Tata Consultancy Services expects some impact from the suspension of H-1B and other non-immigrant work visas by the Donald Trump administration in the United States of America. Based on how the situation evolves, the company anticipates challenges in the long term from a sourcing perspective, Milind Lakkad, the Chief Human Resources Officer said.
This is because, he said, a fair share of students in STEM (Science, Technology, Engineering and Mathematics) in the US are international students, and future changes in the regulations with regard to Optional Practical Training, which allows people on student visas to stay and find work in the US, will not only impact TCS but also the future of technology development in the US.
The proclamation, Milind said, is extremely unfair and is causing an enormous amount of uncertainty and anxiety to the company’s associates.
“These associates help run the major banks, retailers, manufacturing companies, telcos, every day, significantly contributing to the US economy. We understand and empathise with our people,” Milind added.
These comments came as TCS announced its quarterly results for Q1 of FY21.
TCS became the first company to announce its results for Q1 of FY2021, a quarter that was entirely during the lockdown due to the COVID-19 pandemic. As expected, TCS’s Profit after Tax (PAT) saw a decline and came in at Rs 7,008 crore, 13.8% lower than the same period last year. In constant currency terms, revenue growth declined by 6.3% year-on-year.
The company said that while many sectors saw a decline, Life Sciences actually witnessed a surge, growing 13.8% YoY.
Rajesh Gopinathan, Chief Executive Officer and Managing Director, said: "The revenue impact of the pandemic played out broadly along the lines we had anticipated at the start of the quarter. It affected all verticals, with the exception of Life Sciences and Healthcare, with varying levels of impact. We believe it has bottomed out, and we should now start tracing our path to growth.”
Other than that, all other industry verticals showed declines. Banking Financial Services and Insurance (BSFI) declined by 4.9%, retail & CPG by -12.9%, communications & media by -3.6%, manufacturing by -7.1% and technology & services by -4%.
Among geographies, only Europe (+2.7%) and Latin America (+0.2%) registered a growth. In all other markets, there was a decline in growth: North America (-6.1%), UK (-8.5%), India (- 27.6%), Asia Pacific (-3.2%), and MEA (-11.7%).
In a press conference, Milind Lakkad, the Chief Human Resources Officer, said that 1% of the workforce globally is currently working from office or customer locations, and expect 5% of people to return to offices globally by the end of the quarter.
“We want to be very conservative in bringing people to work. Our strategy varies depending on the COVID situation in each country and in each city,” Milind said.
With this, they said their 25/25 model will also get established. “This is our alignment with the new normal,” he said.
However, TCS doesn’t see the WFH model giving the company a cost benefit.
"Does not give us as cost benefit as our entire infrastructure, all 120 locations are kept operationally ready. We are actually significantly investing in maintaining this kind of a dual operating scenario where our technology infrastructure is being upgraded to support the extended workforce while entirely maintaining all our offices on a hot standby basis. This is in fact an investment that we are making and we see 25/25 vision as a long term vision which is more pivoted on what it does in terms of talent availability,” Rajesh said.
The consolidated headcount at TCS stood at 443,676 as of June 30, 2020 comprising 146 nationalities and with women constituting 36.2% of the base. The attrition rate was at 11.1%.
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