Indian IT Cos to pay less to employees

As per the assocham analysis, the average hike in wage cost of IT companies fell to about 22 per cent during Oct-Dec 2007, as against a whopping q-on-q rise of 45 per cent during third quarter of the financial year 2006-07.

Thinning margins due to appreciating rupee is putting pressure on the software companies to put a check on its employees’ pay packages. At the same time, high emphasis would be now placed on productivity efficiencies and cost controls. The trend has already begun with TCS cutting the variable pay of its employees.

Perform well or you'll get axed

India's Top software services firm Tata Consultancy Services Ltd (TCS) is sacking 500of its employees as their performance was rated poorly.

TCS has also started pay cuts from the salaries, wherever internal EVA (economic value-added) target was not achieved. Shortfall of Rs 83 crore in EVA is being recovered from salaries of employees.

EVA is the difference between net profit and the cost of capital. In the quarter ended December 31, TCS appointed 4,037 employees, taking its total headcount to 108,229, up from 83,500 a year ago.