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TCS cuts salaries
By siliconindia
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Monday, 04 February 2008, 20:30 IST
New Delhi: Country's largest software exporter TCS plans a 1.5 percent cut in salaries of its over one lakh employees in the fourth quarter. The move is to offset the economic setbacks that arose as the company fell short of certain financial targets, caused by a combination of various factors including rupee appreciation.
Currently, the company offers a two-tier pay package consisting 70 percent fixed and 30 percent variable pay. The variable has two components - company and individual performance.
The company's Economic Value Added (EVA) for the third quarter was slightly short of target, which has forced it to cut down the salaries, TCS General Manager (Corporate Communications) Pradipta Bagchi said. EVA is the difference between net profit and the cost of capital.
"The cut down is just a small adjustment as against the total compensation paid by the company before starting of the third quarter," Bagchi said. Rupee has appreciated about 14 percent against the U.S. dollar in the last one year.
TCS has about 1,08,229 employees and posted a 19 percent net profit during the third quarter at Rs 1,327 crore ($331.75 million).
According to reports, the EVA based variable payout for the company stood at Rs 293 crore for the quarter. The actual variable payout, made in advance, based on expected EVA amounts to Rs 376 crore.
