TCS cuts variable pay for trainees

MUMBAI, INDIA:IT services major Tata Consultancy Services (TCS) on Tuesday said that it will not give variable pay for trainees during the first six months of their recruitment, effective from this quarter.

The move will affect the first batch of 1,500 freshers for FY '10 who will complete their training in September quarter of the current quarter, says media reports.

“We want them (freshers) to understand variable component will depend on how well they perform in their project. We want that accountability and mindset change to happen from day one,” Ajoy Mukherjee, head, global HR was quoted by media as saying.

TCS Freshers' variable pay works out at Rs 5,000 per month or 19-20 per cent of the total annual pay packet of Rs 3.1 lakh, which was offered to them during their in-campus recruitment. The move will result in savings of close to Rs 75 crore for the company, as it has recruited about 25,000 students from campuses in 2008, though they are yet to join.

At the beginning of this month, TCS had announced that it would hire 25,000 people this year. The move was seen as a fillip to the country's IT recruitment scene which has been seeing a slowdown since the collapse of Lehman Brothers last September. However, the current cost cutting measure indicates that the country's economy is not completely free from the grapple of the credit crunch.