India’s largest IT services firm Tata Consultancy Services, saw headcount decrease by 19, 755 in the September quarter of the current fiscal, according to quarterly disclosures it made.
The fiscal second quarter closed with a headcount of 593, 314 employees, against 613, 069 in the June quarter.
Attrition for the quarter was 13.3%, marginally moderating from 13.8% in Q1, though still more than the company’s previously stated range of 12-13%.
Restructuring and Severance
During the quarter, TCS announced a restructuring exercise, which would result in the termination of 2% of its global workforce. Sudeep Kunnumal, Chief HR Officer clarified on the post earnings analyst call that the company has only laid off 6000, or 1% of the workforce as part of this exercise.
“In Q2, we provided Rs 1,135 crore towards severance. The severance package is much better than industry standards. We approach this whole exercise with empathy and care,” he added.
Severance payouts have been tiered by service length, ranging from six months to two years of salary, it was previously reported. “Additionally, there has been involuntary attrition as part of our regular ongoing efforts pertaining to performance and bench policies,” he said.
In June this year, the firm modified its bench policy which limits employees to a maximum of 35 unallocated or bench days in a year. Those on the bench for longer can face consequences ranging from docked salaries to termination.
The management did not give a firm guidance on when the remaining pink slips as part of the restructuring exercise will be handed out.
TCS management also expressed confidence in its ability to adapt to any changes in US immigration policy, citing limited dependence on visa-linked talent.
Involuntary attrition and immigration strategy
“Approximately just about 500 associates have travelled to the US on H1-B (so far, this year), and we believe our business model will be able to adapt quickly to any changes in immigration policy,” Kunnumal said.
He added that this confidence stems from the company’s localisation efforts, noting, “We have perfected this model in Latin America and (have) a large local workforce in all key geographies, including the US, UK, and Europe, which we will continue to expand.”