TCS and other IT firms may delay new hire onboarding and reduce variable pay for employees.
It is being speculated that current employees of major IT firms like TCS may experience variable pay reductions and may also delay the onboarding of new hires.
Ankush Pandey
The layoff season, which is still in full swing, has had a significant impact on IT workers. TCS is one of the organizations that has so far figured out how to keep away from cutbacks. Yet, it sure is going to certain lengths to save costs, which is something that another report recommends. It is being speculated that current employees of major IT firms like TCS may experience variable pay reductions and may also delay the onboarding of new hires. Everything we know so far is listed here.
Sriram Venkat, a HR firm partner, told Business Today that the IT tech organizations in the nation would report some factor pay cuts in Q4 FY23. He stated that employees in the lower band would not be significantly affected, and that it could range anywhere from 85 to 100 percent at large-cap IT companies. Based on the performance of the business unit, reportedly cuts will be made to mid- to upper-level employees. Due to rising inflation and a slowdown in the macroeconomic system, it is also being speculated that the major IT companies will continue to hire at a slower rate.
"Hiring and expansion have definitely been impacted by the current slowdown." According to Kalyan Durairaj, Director of Human Resources at FourKites (APAC), "IT companies are being cautious with their hiring plans due to economic uncertainties, resulting in a slowdown in headcount growth."
TCS recently announced that it had fewer employees in the third quarter of FY23, a first considering that the company has always reported more employees in each quarter. Compared to the second quarter of FY23, it is said to have lost around 2,000 employees. The IT company also clarified that TCS's growth has not been affected by the decrease in staff and that global uncertainties have nothing to do with it. Venkat suggested that TCS is taking a conservative approach, despite the fact that the company did not specify the specific reason for the reduction in staff.
"TCS had a negative headcount for the first time in Q3, indicating that they are taking a conservative approach," the statement reads. This strategy might also remain conservative for this quarter. Layoffs are another option for mid-cap IT companies to reduce headcount. This will likewise prompt balance in deliberate whittling down."
It is important to note that TCS has already stated that it will not employ layoffs and will not do so in order to cut costs. Milind Lakkad, the company's Chief Human Resources Officer, told PTI that many IT companies have fired employees because they overhired, but TCS has been "cautious" when hiring new employees.
However, Quess IT Staffing CEO Vijay Sivaram informed BT that we will continue to "see a drop and pressure in fresher hiring and campus hiring due to companies overhiring entry-level talent post-COVID." There was a significant increase in hiring of entry-level talent, compared to previous years. Now, organizations are evaluating their requirements."
He revealed that TCS, for example, has a lot of employees who haven't been given any projects yet, so they might hold off on hiring new hires or delay it.
"The delay might last for a while because a lot of big IT companies, like Infosys, Tech Mahindra, and TCS, have huge benches right now." Before attempting to recruit those awaiting onboarding, businesses will first try to utilize their existing talent pool. "They will also slow down entry-level hiring because they already have so many students waiting for onboarding," he stated.
