TCS cuts salaries

NEW DELHI: Country's largest software exporter TCS plans a 1.5 per cent cut in salaries of its over one lakh employees in the fourth quarter, as it fell short of certain financial targets.

Currently, the company offers a two tier pay package consisting 70 per cent fixed and 30 per cent 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.

"The cut down is just a small adjustment as against the total compensation paid by the company before starting of the third quarter,” he said, adding that a combination of various factors including rupee appreciation led to shortfall in the target.

Rupee has appreciated about 14 per cent against the US dollar in the last one year.

TCS has about 1,08,229 employees and posted a 19 per cent net profit during the third quarter at Rs 1,327 crore. EVA is the difference between net profit and the cost of capital.

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.

The advance payment that has to be adjusted amounts to Rs 83 crore which will be recovered during Q4 from the employees.