TCS offers 'outstanding performers' a raise of 12-15% and initiates a promotion cycle.
The impact of salary increases resulted in a decrease of 200 basis points (bps) for the company's margins.
Money Poise
TCS, a software company, announced that it had started its promotions cycle and granted pay raises of 12-15 percent to 'outstanding performers' in an otherwise lackluster quarter. As of April 1st, the new rates were in effect.
Milind Lakkad, chief human resources officer, said in a statement, "We have given a 12-15 percent raise for exceptional performers in the latest annual compensation review and also commenced the promotions cycle."
In reality, pay increases reduced the company's margins by 200 basis points. The company's operating margin of 23.2 percent reflects the impact of the increase, which CFO Samir Seksaria stated was 200 basis points, in a statement released on April 1. Overall, TCS's operating margin dropped by 120 basis points (bps), from 24.5 percent in the previous quarter to 23.2 percent this one.
According to TCS's annual report, the median salary of its employees increased by 5.11 percent in FY23.
This raise comes at an unusual moment, as staff have not yet received word that Infosys will be delaying the raises it normally distributes to non-senior employees in the first quarter of the year.
In a statement, Lakkad explained that 53% of the company's staff currently works from home three days a week, therefore the IT giant is concentrating on getting people back in the office.
"We are committed to attracting, retaining, and rewarding the most talented individuals in our field, and to maximizing their productivity by bringing them back to the office to further cultivate our culture," he explained.
In addition, employees spent 12.7 million hours training in areas like generative AI, cloud computing, data analytics, and more.
Infosys continued to postpone the onboarding of both new and lateral hires throughout the quarter, resulting in a net gain of 523 people.
While we will stand by every promise we have made, this year will be all about capitalizing on the infrastructure we put in place last year, he said.
