TCS draws up austerity plan

KOLKATA: It���s official now. Tata Consultancy Services (TCS), India���s biggest software company in terms of sales, is poised to unveil a host of cost-management initiatives to withstand the global economic downturn.

So much so, the TCS board has ratified a bunch of tough decisions to beef up internal efficiencies to secure the company in the long run.

In a recent email to all company employees, TCS CEO & managing director S Ramadorai has noted: ���At various times, we���ve taken decisions that are tough, but meant for the organisation���s long-term benefit. These decisions need to be seen in light of the current unusual circumstances that we are working through. I realise I am asking you to put the organisation before yourself and asking you to go beyond the call of duty.���

In his email (a copy of which is with ET), Mr Ramadorai further notes: ���Unprecedented situations call for unprecedented responses. These are times of austerity and there are some immediate cost management remedies that we would like to put in place. Details of these will soon be shared with you.���

ET has learnt that key cost management initiatives in the pipeline include ways to rationalise or consolidate TCS��� infrastructure globally to save costs. Other measures include saving on energy costs through efficiency programs and optimising on travel and communication costs. The TCS management is also re-examining its capex program to conserve cash in the current volatile environment. However, the company has no plans to modify its performance-linked variable payout practices to its over 1 lakh employees.

ET had sent emails on November 28 to both Mr Ramadorai and the TCS spokesman, seeking details of the upcoming ���cost-management remedies��� cited in the TCS managing director���s email to company employees.

In response, the TCS spokesman wrote back: ���In terms of cost management programmes, we are looking at ways to rationalise or consolidate infrastructure globally to save costs as well as other conservation initiatives like saving on energy costs through energy efficiency programs, optimising on travel/communications costs as well as ensuring that we use available technologies more effectively to drive costs lower on a sustained basis. ���