TCS salary hike: After HR, now Ratan Tata company’s CFO makes BIG announcement on…, set to affect 6 lakh employees due to…

TCS Chief Financial Officer Samir Seksaria has stated that providing wage hikes to the company’s over 6 lakh employees remains a “priority.” Speaking to PTI following the announcement of TCS’s June quarter results which faced challenges in both growth and margins, Seksaria emphasized that the company is committed to pursuing growth while maintaining profitability.

The company showed a 6 per cent increase in net on non-core income as demand got impacted due to macroeconomic and geopolitical troubles, and deferred its annual wage hikes that typically set in from April.

Stating that TCS has rarely resorted to deferring wage hikes unlike peers, Seksaria said, “My priority is getting back to the wage hike.” He, however, did not specify when the hikes will be delivered.

Typically, the annual wage hikes crimp the operating profit margin by over 1.50 per cent, Seksaria said. 

It reported a 0.20 per cent narrowing in the number at 24.5 per cent for the June quarter, but Seksaria stressed that the intent is to push the margins up into the 26-28 per cent aspirational range.

Seksaria On TCS Performance

Seksaria explained that investments in upfront hiring to capture demand as it comes in hurt the margins, as lack of demand pulled down utilisation levels.

As the company looks to widen the margins, it is grappling with a set of controllable and uncontrollable factors, Seksaria said, pointing out that upping the utilisation and other organisational tweaks are the controllables, while demand is the uncontrollable.

“…demand recovery plus optimisation, we have to focus on both. If demand recovery is prolonged, we will double down on optimisation,” he said.

“Our focus will be growth with profitability. Only profitability without growth doesn’t help,” he said, adding that this should not be taken as the company giving up on demand.

TCS CFO On Hiring

With attrition reaching some bit of concerning levels at 13.8 per cent, Seksaria said the focus will be to retain top talent as it is difficult to build by fresh hiring, and added that some bit of attrition is healthy and it may not take so many measures to retain some part of the talent.

The company does not plan to cut investments but there could be some realignment like building only a part of a structure on a plot, Seksaria said.

TCS will not do acquisitions just for expanding the topline, but it will be capabilities that will drive such inorganic moves, Seksaria said, adding that it keeps looking at opportunities in the market. 

 

(With Inputs From PTI)

 

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