TCS and other IT companies may delays onboarding freshers and current employees could see variable pay cuts, The layoff season is still ongoing, and it has had a significant impact on individuals working for IT firms. TCS is one of the organizations that has avoided layoffs thus far. It is, however, implementing cost-cutting measures, as suggested by a new report. According to reports, current employees of large IT firms such as TCS may face variable pay cutbacks, as well as a delay in the onboarding of new staff. Here’s all we’ve learned thus far.
According to Sriram Venkat, an HR company associate, the country’s IT IT businesses would disclose some variable compensation cutbacks in Q4 FY23. He asserted that employees in the lower band would not be affected by a wide margin and that it may range between 85 and 100 percent for high-size IT businesses. Those in mid- to upper-level positions will allegedly face layoffs based on business unit performance. It is also predicted that large IT firms will continue to hire at a slower pace in the face of growing inflation and a macroeconomic slowdown.
“The current slowdown has had a significant impact on hiring and expansion.” Due to economic uncertainty, IT organizations are becoming careful with their hiring plans, resulting in a slowdown in headcount growth,” stated Kalyan Durairaj, Director of Human Resources at FourKites (APAC).
TCS recently announced that the firm had a low headcount in the third quarter of FY23, which is first given that the company has typically reported rising headcount every quarter. It is claimed that it has cut roughly 2,000 jobs since the second quarter of FY23. TCS further highlighted that the low workforce hasn’t hampered growth and that the decline in staff isn’t due to global uncertainty. While the firm did not specify why the number was lowered, Venkat suggested TCS is taking a safe approach.
“Q3 was the first time a major IT company, such as TCS, had a negative headcount, indicating that they are taking a cautious approach.” This strategy may stay cautious for the remainder of the quarter. Mid-cap IT firms may also cut personnel through layoffs. This will also result in more moderate voluntary attrition.”
It is worth noting that TCS has already stated that it does not intend to lay off staff and would not pursue this method to cut expenses. According to TCS’s Chief Human Resources Officer, Milind Lakkad, several IT businesses have sacked employees due to recent overhiring, but the company has been “cautious” in its approach to employing new staff.
However, according to Vijay Sivaram, CEO of Quess IT Staffing, we will continue to “see a drop and pressure in fresher hiring and campus hiring because companies overhired entry-level talent post-COVID.” There was an increase in entry-level talent hiring, which had not been witnessed in previous years. Organizations are currently revising their requirements.”
He indicated that organizations like TCS now have a large number of employees who haven’t been assigned any projects, therefore they may halt or postpone hiring freshers.
“Because several large IT companies, such as Infosys, Tech Mahindra, and TCS, currently have large benches, companies will first try to utilize their existing talent pool, then try to add the ones waiting for onboarding.” “Because there are already so many students awaiting onboarding, they will slow down entry-level hiring as well,” he added.