TCS doles out up to 8% salary hikes; staff strength crosses 6 lakh

India's largest software services provider Tata Consultancy Services (TCS) on Friday said its employee strength crossed the 6-lakh mark as hiring momentum continued in the milestone quarter. TCS' staff strength stood at 606,331 as on June 30, a net addition of 14,136 during the quarter. The IT services provider's attrition rate was 19.7% in the April-June period.

The IT major handed out pay hikes of up to 8% to its staff. "Following our annual compensation review, employees received salary increases of 5% to 8%, with top performers getting even bigger hikes. Our empowering, performance-driven work culture is helping us attract local talent across all our key markets. Continued hiring momentum resulted in a milestone quarter, with the employee strength crossing the 600,000 mark," says Milind Lakkad, chief HR officer at Tata Consultancy Services.

"Our investment in strategic talent development initiatives and the linking of learning to career development have energized our workforce," Lakkad adds.

The workforce continues to be very diverse, comprising 153 nationalities and with women making up 35.5% of the base, the company says in a regulatory filing.

TCS' employee benefit expenses rose to ₹22,971 crore in the quarter ended June compared with ₹19,212 crore in the same quarter a year ago.

The IT giant reported a 5.2% year-on-year growth in consolidated net profit at ₹9,478 crore for the quarter ended June 30, 2022, aided by strong deal wins.

Revenue from operations rose 16.2% year-on-year to ₹52,758 crore during the April-June quarter of FY23 from ₹45,411 crore during the same period last year.

"It has been a challenging quarter from a cost management perspective. Our Q1 operating margin of 23.1% reflects the impact of our annual salary increase, the elevated cost of managing the talent churn and gradually normalising travel expenses," says TCS chief financial officer Samir Seksaria.

The company says it gradually accelerated its return to office programme in Q1, with about 20% of the workforce now working from office.

During the quarter, TCS resumed in-person meetings, and hosted several clients at its facilities. "We are bringing in more of our associates back to our development centres, and it is steadily increasing at all levels," says N. Ganapathy Subramaniam, chief operating officer and executive director at TCS.