India’s largest IT company Tata Consultancy Services (TCS) recently made 5 days working from office compulsory for employees. The company has asked employees to come back to the office full-time. During the TCS earnings call today (October 10), the company’s chief human resources officer Milind Lakkad said that is the only way to internalise the company’s values.
“We strongly believe they need to come to work so the new workforce gets integrated with the larger workforce. That is the only way they will learn, understand and internalise TCS values and the TCS way. Having said that, we will continue to assess the work models and evolve depending on what works best for our customers and employees,” said Lakkad.
TCS reported its second quarter (Q2) results today. During the quarter, TCS reported a 9% year-on-year (YoY) growth in consolidated net profit to Rs 11,342 crore while consolidated revenue grew nearly 8% YoY to Rs 59,692 crore. Sequentially, the growth was muted, with revenue rising a mere 0.5% and profit up 2.4%. In constant currency (CC) terms, revenue growth came in at 2.8% YoY. As of October 6, promoter companies owned 72.3% of TCS. Foreign institutional investors own the biggest pie at 12.5% while mutual funds and UTI own 3.46% stake.
TCS headcount falls
TCS’s headcount saw a net fall of 6,393 employees in Q2 of FY24, taking the overall headcount to 608,985. Further, the headcount fell by 7,186 compared to the year-ago period. This comes as India’s largest software exporter had added around 523 employees sequentially in Q1. Voluntary attrition for the quarter stood at 14.9% compared with 17.8% last quarter and the company said further improvements in the metric would be seen going forward.
“We should not relate the headcount degrowth with business demand or the business situation,” Lakkad said, as this is happening across quarters. “People coming in for the last 18 months are getting leveraged now in the past year.” Reduced hiring numbers reflect the investment in fresh talent made over the past two-three years paying off, Lakkad said, adding the company has recalibrated hiring numbers as attrition has reduced.
Hiring is continuing in large numbers, he said, both from campus and elsewhere. Trainee hiring continues and all offers will be honoured. “There may be delays, a quarter here and there, but they will come on board,” the CHRO said.
Regarding variable pay, the company will pay 100% of variable pay for 70% of the workforce, Lakkad said. The remaining will get paid based on the business unit performance, he added.
TCS had told employees informally to return to office five days a week starting October 1.
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