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<ul><li>Indian IT giants are scrutinising every aspect of their expenses in order to cut down on costs as business takes a hit during the coronavirus pandemic. </li><li>Wage hikes have been paused, new employees aren’t being onboarded, and it helps that <keyword id="123591" type="PERSON" weightage="20" keywordseo="Work-from-home">work from home</keyword> means that travel expenditure is low for the meanwhile. </li><li>The weakening rupee against the US dollar brings in support. </li><li>Cost-cutting measures may help companies tide through the turbulent time, but they won’t help overall margins expand. </li></ul>The global economic recession would mean that the companies that employ the services of Tata Consultancy Services (<keyword id="6357150" type="ORGANIZATION" weightage="20" keywordseo="tcs">TCS</keyword>), <keyword id="6354512" type="COMPANY" weightage="20" keywordseo="Infosys">Infosys</keyword>, HCL Technologies, <keyword id="10862" type="CITY" weightage="20" keywordseo="Wipro">Wipro</keyword>, <keyword id="43217" type="CITY" weightage="20" keywordseo="Tech-Mahindra">Tech Mahindra</keyword> and the likes are likely to cut corners and therefore, the Indian IT giants will also have to curb costs. All IT majors in India have listed a few ways ⁠— no salary hikes, reduced costs like travel and sponsorships, increased work from home⁠ — to cut costs. And, the Chief Financial Officers (CFOs) are hoping that a stronger dollar will boost margin when earnings are converted to rupee. However, a former Infosys Board Member TV Mohandas Pai believes that all these may, at best, keep the margin intact. “The IT industry will suffer in the near term due to bankruptcies of clients, a decline in spends, and economic contractions,” Pai told Edelweiss. “Big companies are already making 20 to 25% margins, and both rupee depreciation and productivity improvement are the tools that enable them to maintain margins,” he added. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Operating Margin Q4 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TCS </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">25.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Infosys </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">21.1% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HCL Technologies </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">20.9% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Wipro </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">17.6% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Tech Mahindra </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">15.5% </td></tr></tbody></table> IT majors have ‘no regret’ capping salaries for the time being Wipro is considering temporarily putting employees on leave in order to manage costs. Similarly, Infosys CFO Nilanjan Roy, said “We have stopped hiring temporarily, we have also frozen any salary hikes, we have temporarily suspended all promotions — so these, we believe, are no-regret moves,” during the fourth-quarter earnings call. So, how much does that save? According to the TCS annual report, the average annual increase was 6% in India. And, for the top five IT companies in India the employee costs can range from 30% to as much as 54%. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Actual employee cost FY20 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% of revenue </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">HCL Technologies </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 9,916 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">30.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TCS </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 64,906 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">49.4% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Infosys </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 42,434 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">53.7% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">TM </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 9,282.70 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">31.8% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Wipro </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹ 26,171.80 crore </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">51.9% </td></tr></tbody></table> ‘Work from home’ can be a big cost saver <keyword id="141968" type="CITY" weightage="20" keywordseo="HCL-Tech">HCL Tech</keyword> has proposed a <a href="https://www.businessinsider.in/business/corporates/news/hcl-tech-follows-tcs-and-infosys-lead-says-50-of-its-employees-will-work-from-home-even-after-the-lockdown-is-lifted/articleshow/75593968.cms">50/50 plan</a> ⁠— where only 50% of its employees will need to work from office at any given time ⁠— while TCS CEO Rajesh Gopinathan wants only <a href="https://www.businessinsider.in/business/corporates/news/tcs-ceo-says-the-business-model-is-20-years-old-and-its-time-to-go-employee-lite/articleshow/75243124.cms">25% of the employees on any project at any one place, at any one time. </a> The rest can work from home even after the lockdown has ended. “This would axe travel and real estate costs by roughly 300 to 400 basis points,” according to Pai. A hundred basis points make for a percent. However, there are other <a href="https://news.stanford.edu/2020/03/30/productivity-pitfalls-working-home-age-covid-19/">experts who believe</a> that any increase in productivity seen during the pandemic may only be temporary as other social options are limited. Once the lockdown is lifted and normal activity resumes, the same level of productivity may prove difficult to sustain. A weaker rupee is good for companies that earn in dollars Infosys has already gained 2% on the rupee depreciation — which meant a 50 basis points margin benefit — in the fourth quarter with 97% of their billing in foreign currency. HCL technologies also saw a similar benefit on their margins of around 53 basis points. “Foreign exchange movements, particularly the rupee movement is the one that gave us the maximum benefit,” said CFO of HCL Technologies, Prateek Agarwal. For TCS, movements in currency exchange rates through the year resulted in a positive impact of 0.1% on the reported revenue — that’s around 10 basis points for the whole year. These cost-cutting measures are the need of the hour to maintain margins, however, they aren’t going to spurt profitability, according to Pai. IT majors will be happy keeping the profit margin where it is with FY20 being more about sustaining growth rather than boosting profits. SEE ALSO: <a href="https://www.businessinsider.in/finance/news/indian-banks-earn-3-1-billion-with-rbi-instead-of-giving-loans-to-businesses-despite-repo-rate-cut/articleshow/76000355.cms">Indian banks have made $3.1 billion just by parking funds with the RBI — instead of giving them out as loans</a> <a href="https://www.businessinsider.in/policy/economy/news/these-indian-states-have-seen-the-worst-economic-impact-due-to-the-covid-19-pandemic/articleshow/75999085.cms">These Indian states have seen the worst economic impact due to the COVID-19 pandemic</a> <a href="https://www.businessinsider.in/business/corporates/news/airtel-share-price-target-as-africa-unit-nears-a-billion-dollars-in-revenue/articleshow/75970641.cms">Airtel’s Africa unit is now a nearly-billion dollar business where every user pays 40% more than the one in India</a>

Three ways TCS, Infosys and other IT giants in India are trying to cut costs — but it’s not going to increase their profitability

<ul><li>The coronavirus pandemic graph continues to rise upwards in India with over 14 lakh cases. </li><li>And with this optimism of businesses hoping to regain their lost momentum seems to be wearing off. </li><li>Several businesses continue to stare at an uncertain future, which has brought around the second wave of <keyword id="30690" type="PERSON" weightage="20" keywordseo="Job-cuts">job cuts</keyword>. </li></ul>From hospitality, fitness to the aviation industry, the jobs scenario looks bleak and the situation seems unlikely to improve anytime soon. The COVID-19 pandemic has spread far and wide and the numbers are multiplying with over 14 lakh cases in India currently. Given the weak economic scenario and uncertainty all around, several businesses are treading the path of caution and we are witnessing a second wave of job cuts. Food delivery unicorn <keyword id="6358977" type="UNKNOWN" weightage="20" keywordseo="swiggy">Swiggy</keyword> has laid off over 350 employees after its initial exercise of laying off over 1100 people in May. Swiggy’s official statement said that ‘the past few months have reshaped our lives in an unprecedented manner’. However, the company called the latest layoff as a final realignment exercise. “In May, we began the exercise of realigning resources to create capacity in higher potential areas with the optimism of the business attaining pre-covid levels in the near-term. With the industry still only having recovered to about 50% of its peak, we have unfortunately had to go ahead with this final realignment exercise with the net loss of 350 jobs. We are concluding the exercise we began late May and there are no plans for any further restructuring,”said a Swiggy spokesperson. Food delivery and restaurants have been one of the worst hits ever since the coronavirus lockdown began in March. Social distancing is taking a toll on businesses. People remain wary and unwilling to venture out of their homes still for leisure and entertainment. Hence, many restaurants have continued to <a href="https://www.cnbctv18.com/hospitality/less-than-40-of-hotels-restaurants-are-open-in-india-says-nrais-anurag-katriar-6284251.htm">stay shut</a>, while many others are in the fear of shutting shop. Meanwhile, health and fitness startup Curefit too has reportedly recently gone for a <a href="https://tech.economictimes.indiatimes.com/news/internet/curefit-cuts-jobs-furloughs-600-staff-in-second-round-of-layoffs-as-business-suffers-amid-lockdown/77013891#:~:text=Curefit%20cuts%20more%20jobs%2C%20furloughs%20staff%20as%20business%20suffers%20amid%20lockdown,-The%20downsizing%20comes&amp;text=Health%20and%20fitness%20startup%20Curefit,directly%20aware%20of%20the%20matter.">second round</a> of layoffs and furloughs. This after initially laying off over 800 people in the beginning of May. Curefit was founded in 2016 by Myntra co-founder Mukesh Bansal and former Flipkart Chief Business Officer Ankit Nagori. The company also has celebrity brand ambassadors like Hrithik Roshan and Tiger Shroff and has over 270 centres across India and Dubai. Unlock 2.0 in India has seen opening up of certain sectors, however gyms and fitness centers continue to remain shut and the subsequent bouts of strict lockdowns in several parts of the country is not helping their cause. Another sector to be severely impacted due to the coronavirus pandemic is the aviation industry. As the situation worsens and with international flights reopening only in a phased manner, the likes of IndiGo, Air India have been on a wait and watch mode. <a href="https://www.businessinsider.in/india/news/indigo-announces-second-round-of-deeper-pay-cuts-starting-september-1/articleshow/77195457.cms">IndiGo</a> yesterday announced a second round of deeper <keyword id="1118212" type="PERSON" weightage="20" keywordseo="pay-cuts">pay cuts</keyword>, even after it laid off over 2300 people, whereas its government-run competitor <a href="https://www.businessinsider.in/india/news/air-india-slashes-employee-allowances-up-to-50-despite-protests/articleshow/77108080.cms">Air India</a> has been extending leave without pay and slashing salaries for several of its employees. SEE ALSO: <a href="https://www.businessinsider.in/india/news/escorts-earnings-only-show-that-calling-a-rural-recovery-right-now-would-be-pompous-all-eyes-will-now-be-on-mm/articleshow/77200867.cms">Escorts earnings only show that calling a rural recovery right now would be pompous⁠— all eyes will now be on M&amp;M</a> <a href="https://www.businessinsider.in/careers/news/latest-vacancies-at-india-at-tcs-wipro-intel-google-and-hike-companies/slidelist/77198197.cms">Here's a list of latest vacancies in India at TCS, Wipro, Intel, Google, and Hike</a>

India sees second wave of layoffs and pay cuts as companies grapple with COVID-19 pandemic

<ul><li><keyword id="28721" type="COMPANY" weightage="20" keywordseo="Cognizant">Cognizant</keyword> is planning to layoff staff. As many as 7,000 mid level and senior level jobs are on the line. </li><li>Another 6,000 jobs may also be affected, globally as the IT major plans to close down its content moderation services. </li><li>Cognizant posted a quarterly revenue of $4.25 billion, 4.2% up from last year.</li></ul>American technology multinational Cognizant is expected to lay off hundreds of employees to cut costs. According to an ET <a href="https://m.economictimes.com/tech/ites/cognizant-to-cut-7000-mid-senior-level-jobs-exit-content-moderation/articleshow/71829299.cms">report</a>, as many as 7,000 mid and senior level jobs are on the line — accounting for 2% of its workforce. As many as 5,000 employees will be redeployed into other job roles. “To improve cost structure to partially fund these investments and advance Cognizant’s growth agenda, it has made the decision to remove approximately 10,000-12,000 mid-to-senior level associates worldwide from their current roles in coming quarters. The gross reduction is expected to lead to a net reduction of approximately 5,000 to 7,000 roles as the company aims to reskill and redeploy approximately 5,000 of the total associates impacted,” Karen McLoughlin, CFO, Cognizant said. Given the job cuts, the company expects to save up to $500 million in the next two years Another 6,000 jobs may also be affected globally as the IT major plans to close down its content moderation services — including social media platforms like <keyword id="6354576" type="UNKNOWN" weightage="20" keywordseo="facebook">Facebook</keyword>. It will exit the services focussed on identifying objectionable content, keeping in mind the mental health of moderators, the company said. “Exiting this area will impact an additional approximately 6,000 roles worldwide, though the company intends to work with its partners to explore ways to transition the roles to alternative vendors, thereby reducing the impact to associates,” ET <a href="https://m.economictimes.com/tech/ites/cognizant-to-cut-7000-mid-senior-level-jobs-exit-content-moderation/articleshow/71829299.cms">reported</a> citing company executives. The closure of content moderation services will also impact its communications, media and technology verticals. “Cognizant is aligning with clients’ digital imperatives, and doubling down on four key areas — Data, Digital Engineering, Cloud and Internet of Things (IoT),” the company noted. The company posted a 4.2% increase in its third quarterly revenue at $4.25 billion, as compared to the same period last year. It also witnessed a $20 million jump in its net income at $497 million, compared to $477 million last year. At the same time, it is trying to boost revenues by tightening travel budgets, and increasing variable pay. In 2018, Cognizant also introduced a <a href="https://www.businessinsider.in/cognizant-begins-voluntary-separation-program-for-senior-staff-report/articleshow/69515809.cms">voluntary separation </a>programme for senior executives. Under this, it offered 12-month salary and stock benefits depending on the employee’s tenure in the organisation. See also: <a href="https://www.businessinsider.in/policy/news/h-1b-visa-rejection-rates-rise-sharply-30-of-cognizant-capgemini-accenture-wipro-and-infosys-applications-denied/articleshow/71821596.cms">H-1B visa rejection rates rise sharply — 30% of Cognizant, Capgemini, Accenture, Wipro and Infosys applications denied</a> <a href="https://www.businessinsider.in/case-against-accenture-cognizant-caspex-for-bad-leave-policy-and-long-working-hours/articleshow/71074536.cms">Cognizant, Accenture and Caspex accused of 'white collar slavery' in a new lawsuit</a> <a href="https://www.businessinsider.in/cognizant-to-hire-500-sales-professionals-to-boost-its-digital-technology-services/articleshow/70954946.cms">Cognizant will hire 500 sales staff and looks to poach ‘disillusioned’ IBM employees</a>

7,000 Cognizant jobs are on the line as the tech major rejigs workforce

Pune, May 10 () IT Services firm Tech Mahindra hasbeen issued a notice by the office of the Labour Commissioner,Pune, in Maharashtra on a complaint that the company hadreduced salaries of its employees to maintain "profitability'in the midst of the COVID-19 pandemic.A similar notice was issued earlier this month toanother IT firm, Wipro Technologies Ltd, on a complaintalleging that the firm was benching its employees.National Information Technology Employees Senate(NITES), an organisation working for the welfare and benefitsof employees in IT industry, had approached the LabourCommissioner's Office, claiming that they have receivedcomplaints from employees of Tech Mahindra, Pune, regardingthe reduction in salaries to maintain the "profitability ofthe business" under the COVID-19 pandemic."The company had also notified its employees throughan email on May 6 that the shift allowance, which is betweenRs 5,000 to Rs 10,000 per employee, will be stopped from May1," the complaint letter from NITES reads.The application further claimed that because of thisdecision, payment of over 13,000 employees of Tech Mahindra isreduced.The NITES sought appropriate legal action against TechMahindra stating that the firm has violated the Maharashtragovernment's directions, rules and regulations.In a notice issued on the same date, officials in theLabour Commissioner's Office directed the firm to go throughthe state government's resolution dated March 31, 2020, andtake appropriate steps and release the salaries for March andApril and to inform the labour commissioner's office.The notice, signed by Nikhil Walke, Assistant LabourCommissioner, asked the firm not to terminate employees orreduce the salaries, and further stated that otherwise legalaction will be taken.Tech Mahindra Spokesperson said, "The shift allowancepaid for hardship due to travel to work at odd hours and otherout of pocket expenses, continues to be paid to all TechMahindra associates, who are coming to the office or are atclient locations as per policy."Our focus remains to ensure the well-being of ourassociates, customers and partner eco-system while maintainingbusiness continuity".Meanwhile, in its notice dated May 1 to WiproTechnologies Ltd on an NITES complaint that the company wasbenching its employees, the Pune Labour Commissioner Officeasked the IT firm to respond and not terminate any employees.Harpreet Saluja, general secretary, NITES, said theyhad approached the labour commissioner's office after theyreceived complaints from employees of WIPRO BPO, located inHinjewadi regarding employees being put on the bench tomaintain profitability."The company also notified the employees on April 23that they are on the bench with immediate effect. Because ofthis (the decision of the company) the pay and jobs of morethan 300 employees are at risk," the complaint reads.A statement from Wipro Limited stated that thespeculation related to the workforce is unfounded and has nobasis."Wipro categorically denies these rumours. There areno salary cuts for employees who are in between projects andare awaiting new assignments. Also, the company wants toreiterate that there are no retrenchment plans. Wipro haswell-defined policies and people practices in place to takecare of its employees," the statement reads.It further stated that Wipro is yet to receive anycommunication from the Labour Department.The company will present the facts before thedepartment, as and when required. SPK SR AANSK NSK

Pune:Labour office notice to Tech Mahindra on alleged pay cuts

Annoyance over low pay, disappearing perks and uncertain future has forced Indian techies to vent their anger on social media, while earlier, the platforms were used to talks about break-ups, crushes and troubles with managers. This year, several IT companies have rolled out single digit salary increases while also resorting to layoffs to save money in terms of employee salaries. Also read: <a href="http://www.businessinsider.in/Indian-IT-sector-is-slowing-down-and-TCS-Infosys-etc-may-post-worst-Q2-performance-results-in-10-years/articleshow/54776935.cms">Indian IT sector is slowing down</a> The reason could be <a href="http://www.businessinsider.in/Infosys-trying-to-appease-Trump-government-by-hiring-Americans-says-Head-Hunters/articleshow/58534453.cms">hiring plans</a> in the US and the increasing cost cutting tactics in India. "Welcome to Jaipur for its amazing summers. Because <keyword id="6354512" type="CITY" weightage="100" keywordseo="Infosys">Infosys</keyword> Jaipur DC has stopped switching on ACs in the name of cost cutting," says one such rant from an Infosys employee. Also read: <a href="http://www.businessinsider.in/IT-professionals-seeking-legal-options-as-speculations-over-Cognizant-firing-6000-employees-in-India-gather-steam/articleshow/58571212.cms">IT professionals seeking legal options as speculations over Cognizant firing 6,000 employees in India gather steam</a> Other issues being discussed are lack of tissue papers, shuttered in-campus laundromats as well as restrictions on timings of coffee machines. "Everyone is worried. There is so much talk about layoffs because of automation and needing to pay for US hiring. There is a new rumour every day," a mid-level employee with <a href="http://www.businessinsider.in/TCS-denies-reports-of-downsizing-says-we-are-here-to-create-jobs-not-to-downsize/articleshow/58626845.cms">TCS</a> told <a href="http://economictimes.indiatimes.com/news/industry/tech/ites/indian-techies-take-to-social-media-to-vent-their-ire/articleshow/58621816.cms">ET</a>. Also read: <a href="http://www.businessinsider.in/Worsening-situation-Infosys-Wipro-to-cut-jobs-middle-level-employees-to-be-worst-hit/articleshow/58588906.cms">Worsening situation? Infosys, Wipro to cut jobs; middle-level employees to be worst hit</a> IT employees are frequently losing jobs in India. In the recent past, <a href="http://www.businessinsider.in/Cognizant-has-come-up-with-a-new-way-to-let-go-employees-to-cut-costs-Here-it-is/articleshow/58510498.cms">Cognizant</a> has fired more than 6,000 employees and announced voluntary separation plans for its senior employees. Similarly, <keyword id="10862" type="CITY" weightage="100" keywordseo="Wipro">Wipro</keyword> and Infosys have decided to layoff at least 600 and more than 1,000 employees recently. (Image source The Next Web)

IT professionals take to social media to voice their displeasure

Already hit by new US visa rules, the Indian IT companies may have to suffer another soft blow. 
 
The UK is considering increasing minimum salary of IT employees entering the country, a move that increase costs to companies and will check migration. 
 
UK, which is the second largest market for Indian IT companies, wants to increase the minimum salary to £ 41,500. 
 
The proposal by UK's Migration Advisory Committee (MAC) is likely to have a combined impact of £1,200 per applicant per year. 
 Indian IT companies enter UK through tier-2 visas and companies like <keyword id="6357150" type="CITY" weightage="20" keywordseo="TCS">TCS</keyword>, <keyword id="6354512" type="CITY" weightage="20" keywordseo="Infosys">Infosys</keyword>, <keyword id="10862" type="CITY" weightage="20" keywordseo="Wipro">Wipro</keyword> make use of intra-company transfer visas. 
 However, the proposal did not go well with <keyword id="6372077" type="CITY" weightage="20" keywordseo="Nasscom">NASSCOM</keyword> as UK wants to lower down annual net migration to the tens of thousands (from the current level of 336,000). 
 
"We are disappointed that companies leveraging Indian talent in information technology domain are singled out in the report. The UK and India enjoy strong trading relationships: the commitment to increase trade was renewed when Prime Minister Modi visited the UK in 2015," said Nasscom president R Chandrashekhar. 
 
MAC report stated that in 2014, tier-2 visas accounted for an inflow of 52,478 people into the UK. 
 
To reduce migration through the tier-2 route, "price should be the main mechanism" and higher costs would likely reduce demand, according to MAC. 
 
Chandrashekhar said the report does not have evidence that a rise in costs would cut migration or raise availability of skilled workers in the UK. 
 
(Image: Indiatimes)

For TCS, Infosys and Wipro, sending employees to the UK will be a costly affair!

<ul><li>Shares plunged nearly 7% as the shrinking margin disappointed investors.</li><li>Revenue for the Noida-based IT services firm grew a strong 7% after adjusting foreign exchange fluctuations. This is better than that of TCS and Wipro.</li><li>The reason for the street’s disappointment was the operating profit margin at 19% which didn’t grow at all despite the strong growth in revenue.</li><li>Check out the latest news and updates on <a href="https://www.businessinsider.in/">Business Insider</a>.</li></ul><keyword id="30331" type="General" weightage="20" keywordseo="hcl-technologies" source="Orion">HCL Technologies</keyword> clocked a 7% growth in revenue (after adjusting for foreign exchange changes) between October and December 2021. Now, that’s better than <a href="https://www.businessinsider.in/tech/enterprise/news/tcs-vs-infosys-vs-wipro-how-indias-three-it-giants-stack-up-against-each-other/slidelist/88860676.cms#slideid=88860749">TCS and Wipro</a> and it should have been a reason for the stock market to cheer. However, the stock slipped nearly 7% when the market opened for trade on Monday (Jan 17). <div type="image" title="hcl tech share" height="900" width="1200" msid="88944640" hostid="261"></div>The reason for the street’s disappointment was the operating profit margin of 19% which didn’t grow at all, compared to three months earlier, while the revenue grew sharply. Salary hikes and cost of hiring and retaining employees are eating into the profit, according to analysts at Sharekhan, a Mumbai-based broking firm. So much so that the company has cut its operating margin (earnings before interest and taxes) guidance for the full year ending March 2022 to 19% from the earlier estimate of 19-21%. The reason is the sharp jump in attrition, which has more than doubled since the end of March 2021. <div type="image" title="hcl tech attrition" height="900" width="1200" msid="88944657" hostid="261"></div>While the costs are rising, the business is growing too. The management at HCL Tech expects a double digit growth i.e anything above 10%, for the full year ending March 2022. That’s quite encouraging. <div type="image" title="hcl tech reve" height="900" width="1200" msid="88944667" hostid="261"></div>The question is whether this will result in higher profits as well. Analysts at Motilal Oswal believe that all the growth on the topline will trickle down to profit next year onwards. In a report dated Jan 17, Motilal Oswal has increased the earnings estimate for the year ending March 2023 by 2%. Here are target prices set by several brokerage firms for the company’s share price. <table style="border-width: initial; border-style: none; table-layout: fixed; width: 468pt;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Brokerage firm </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Target price </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Implied change from Friday’s closing price </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Citi </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,385 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">3.5% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">UBS Securities </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹925 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">-30% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">JP Morgan </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,500 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">12% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Nomura </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,580 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">18% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Morgan Stanley </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,450 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">CLSA </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,450 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">8% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Credit Suisse </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,650 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">23% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Emkay Global </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,460 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">9% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Sharekhan </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,550 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">15% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Motilal Oswal </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">₹1,690 </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">26% </td></tr></tbody></table> SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/budget/news/even-after-the-lic-ipo-indian-government-may-be-well-short-of-its-divestment-target/articleshow/88938799.cms">Even after the LIC IPO, Indian government may be well short of its divestment target ⁠— for a third year in a row</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/business/auto/news/tesla-india-prospects-get-a-boost-as-states-compete-with-each-other-to-invite-elon-musk-to-their-backyard/articleshow/88890951.cms">Tesla India prospects get a boost as states compete with each other to invite Elon Musk to their backyard</a>

The street is dumping HCL Tech shares because its employees are leaving at a faster rate than ever before

<ul><li>While a lot of companies are doling out pink slips, there are a few that are keeping their promises to new campus hires. </li><li>IT giants like TCS, Capgemini, Google, Accenture and Wipro said that they will honour all their employment offers. </li><li>Hindustan Unilever (HUL), Biocon, Bain &amp; Company, PepsiCo and <keyword id="136162" type="COMPANY" weightage="20" keywordseo="Boston-Consulting-Group">Boston Consulting Group</keyword> will also bring new recruits onboard. </li><li>A selected few companies are onboarding new hires virtually. “We will go ahead and deliver a 100% signature HUL experience virtually. Projects which required extensive fieldwork were tweaked slightly,” Anuradha Razdan, executive director (HR), HUL told TOI.</li></ul>While a lot of companies are doling out pink slips to employees or cutting salaries, there are a select few that are keeping their promises to new campus hires even in difficult times. In this thin list are IT giants like TCS, Capgemini, Google, Accenture and Wipro who said that they will <a href="https://m.timesofindia.com/business/india-business/many-large-cos-will-honour-hiring-pledge/amp_articleshow/75130365.cms">honour all the job offers</a> rolled out earlier. TCS and Wipro are hiring over 40,000 graduates this financial year while <keyword id="28721" type="COMPANY" weightage="20" keywordseo="Cognizant">Cognizant</keyword> and Capgemini committed to bring all new hires onboard. According to a TOI report, Google is also bringing its fresh recruits onboard. It usually hires nearly 60 campus graduates every year in India. In February 2020, Cognizant announced that it will hire 20,000 ‘digitally ready’ freshers at an increased compensation of ₹400,000 per annum. But, given the current situation, the onboarding dates may vary because of the extended lockdown and completion of the academic programme. However, the promised ‘hike’ might be missing. Capgemini, on the other hand, <a href="https://www.businessinsider.in/careers/news/capgemini-and-cognizant-plan-to-hire-35000-freshers-in-india/articleshow/74173093.cms">rolled out over 4,000 offers to lateral hires</a> and offered 2,000 freshers in the quarter ending March. The tech giant is now planning to absorb all of them, the company told the Times of India. IIT freshers are not immune to Corona impact Even at the elite IITs, several companies postponed the joining dates, slashed salaries and are even considering revoking the job offers rolled out earlier. The institutes are now planning to conduct a second placement drive for those impacted by the withdrawals. Appealing to the recruiters, V <keyword id="168635" type="PERSON" weightage="20" keywordseo="Ramgopal-Rao">Ramgopal Rao</keyword>, director at the <keyword id="55119" type="COMPANY" weightage="20" keywordseo="Indian-Institute-of-Technology">Indian Institute of Technology</keyword> (IIT) Delhi <a href="https://www.businessinsider.in/careers/news/iit-and-iim-job-offers-are-fast-vanishing-and-a-second-placement-drive-in-july-might-be-underway/articleshow/75003350.cms">said</a> “These students are capable of getting you out of recession faster than you can imagine.” HUL, Biocon, Bain, Pepsi and BCG aim a stronger comeback Other than the IT giants, companies such as Hindustan Unilever (HUL), Biocon, Bain &amp; Company, PepsiCo and Boston Consulting Group are also hiring to come back stronger as the lockdown lifts. A selected few companies are onboarding new hires virtually. HUL already hired over 100 interns from the country’s top B-schools including Indian Institutes of Management (IIMs) and Narsee Monjee Institute of Management. “We said we will go ahead and deliver a 100% signature HUL experience virtually. Projects which required extensive fieldwork were tweaked slightly,” Anuradha Razdan, executive director (HR), HUL<a href="https://m.timesofindia.com/business/india-business/many-large-cos-will-honour-hiring-pledge/amp_articleshow/75130365.cms"> said</a>. Biocon will also onboard all its 250 new recruits. Megha Chawla, partner at Bain &amp; Company, told TOI that there won’t be an impact on campus hires as she anticipates a ‘solid bounce back’ once the lockdown is lifted. See also: <a href="https://www.businessinsider.in/careers/news/accenture-launches-people-work-connect-to-help-fired-employees-find-jobs/articleshow/75144624.cms">Accenture launches People+ Work connect to help fired employees find jobs</a> <a href="https://www.businessinsider.in/careers/news/over-136-million-jobs-are-at-risk-due-to-corona-lockdown-here-are-the-worst-hit-sectors/articleshow/74941658.cms">Over 136 million jobs are at risk due to Corona lockdown — Here are the worst-hit sectors</a> <a href="https://www.businessinsider.in/policy/economy/news/india-unemployment-job-losses-at-many-companies/articleshow/75130701.cms">India’s looming jobs crisis is starting to unravel within the first 21 days of coronavirus lockdown</a>

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