KOLKATA, INDIA: IT major Tata Consultancy Services (TCS) said on Thursday that the possibility of job cuts in the company cannot be ruled out and there will not be any salary hike next year.

While addressing a press conference here, TCS chief executive and managing director S. Ramadorai announced a slew of measures, including reviewing the variable pay structure of employees, to weather the economic slowdown.

“We are reviewing the variable pay component of employee salaries. At this point of time, we are not contemplating any reduction in any other component of the salary package but if the situation worsens then we have to take some action,” said Ramadorai.

The variable pay component of TCS employees differs between 22 per cent and 35 per cent of of the employees' cost to the company, depending on employee rank, he said. This pay represents eight per cent of the total revenue of TCS.

Asked whether TCS would consider retrenchment if the situation worsened, Ramadorai said: 'We are not ruling it out. But as of now we don't have any such plans.'

TCS, which has 140,000 people on its rolls, has decided not to hike salaries now, he added. It has put on hold lateral recruitment 'except where we have an urgent requirement', and decided to transfer overseas on-site operations to off-shore wherever possible.

The company has also decided to increase working hours from 40 to 45 a week from next financial year (2009-10), and curtailed traveling expenses. “We have requested employees to travel only when there is a need,” Ramadorai said.

He said there was a 4 to 15 per cent pricing pressure on the company following re-negotiation of new orders by clients. “The environment is not as friendly as it used to be. There are genuine problems,” Ramadorai said, adding: “A client even asked for a 70 per cent price cut, but we said we cannot do that.”

To a query on the company's present order book, he said: 'Anything we say today may not be valid tomorrow. Because the company placing the order may go bankrupt.'

“In the fourth quarter of 2008-09, we will have either no growth or de-growth,” he added.

Ramadorai said at the entry level, the company has given 24,500 job offers for the next fiscal. “As of now, we are standing by our commitment. But we may delay the recruitment from one quarter to another, think of giving them extended training and may even opt for pay renegotiation if the situation worsens,” he added.

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