Just weeks after the PR disaster where employees of Tata Consultancy Services (TCS) outed India’s largest IT services firm for “silent firing” of mid-level employees that led to its stock dipping and Jefferies posting a rather embarrassing warning as a research note, the firm announced major hikes.
TCS on Wednesday informed its employees that it will roll out wage hikes for about 80 per cent of the workforce, covering mid to junior levels. The latest TCS move came at the heels of the IT giant preparing to lay off about 12,000 staff, or 2 per cent of its workforce, over the course of the year.
Last month’s layoff news invited scathing reactions from the IT employee union, the Nascent Information Technology Employees Senate (NITES), which even wrote to Union Labour Minister Mansukh Mandaviya calling the TCS action “unethical” and “outright illegal”.
THE WEEK covered this last month, including how TCS stock slid to a 52-week low on July 29. Back then, ratings firm Jefferies in its report TCS layoffs - A canary in the mine? even said the firing could lead to “execution slippages” in the near-term and “higher attrition” in the longer run.
The latest pay hikes, however, are expected to kick in from September 1, according to the internal email by Chief HR Officer Milind Lakkad and CHRO Designate K Sudeep. “We are pleased to announce a compensation revision for all eligible associates in grades up to C3A and equivalent, covering 80 per cent of our workforce,” the email read, according to agencies.
Despite not being the best paymaster, TCS had traditionally enjoyed lower-than-industry attrition levels, as it offers a long-term career path and job stability to its employees. The latest pay hike might change this for the better.
TCS’s latest move in its path of redemption, however, has not impressed investors enough. On Thursday morning, the firm’s shares traded in the red consistently.
