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TCS bonanza: Rs 2,628cr bonus for staffers


TCS bonanza: Rs 2,628cr bonus for staffersMUMBAI: The Diwali windfall has come six months early for 2.5 lakh employees of software services giant Tata Consultancy Services (TCS). India's biggest private sector employer and top recruiter of women will dole out a special reward amounting to Rs 2,628 crore ($423 million), probably the biggest-ever bonus payout by an Indian company .

TCS will gift staffers one week's salary for every year of service completed, to mark 10 years of its listing on the Indian bourses. Staffing firms said this marked a feel-good factor for India Inc at the beginning of the new financial year. 

HR experts said recruit ments are on an upswing now given that new-age companies are attracting talent from across sectors. This has put the spotlight back on employee retention policies, of which bonuses are the most popular. Though the bonus will dip into TCS' cash re serves of Rs 23,000 crore, the biggest beneficiary of the largesse will be TCS lifers including CEO and MD N Chandrasekaran. 

The 51-year-old Chandrasekaran, the second highest paid professional CEO in India's IT services sector, joined TCS as a programmer in 1987 and rose to become its boss in 2009.

 

"The special reward to employees acknowledges the role they have played in building TCS into one of the most respected and valued technology services companies in the world," said Chandrasekaran. 

While TCS employs over 3 lakh people worldwide, onethird of them women, the bo nus will be applicable to those staffers, based in the country and outside, who have completed at least a year in service. 

The provision for a onetime bonus, which has dragged down TCS' FY 15 fourth-quarter profits by nearly 31% to Rs 3,713 crore, comes nine months after TCS shelled out Rs 7,835 crore as special dividend to its six lakh shareholders on completing a decade of listing. 

The software arm of the Tata Group went public in 2004 and is today India's most valuable company with a market capitalization of Rs 5.06 lakh crore. 

Kamal Karanth, MD, Kelly Services said, "Recruitments have picked up in the industry . TCS' competitors, as also e-commerce companies, are hiring C-level executives. These factors could have led TCS to give out a bonus to retain its critical talent.'' Historically TCS has been known as a conservative pay master, compared with other IT companies like Infosys which rewarded staffers with stock options and has created millionaire employees. In 2010, Infosys had issued bonus shares worth Rs 159 crore to its employees to mark its 30th anniversary . Start-ups too are offering great salaries to woo high potential talent. 

TCS has an attrition rate of 14% in the Indian IT sector, which is considered to be moderate. "Typically the IT sector is very competitive in terms of talent and we constantly see the larger players devising ways of retaining their talent through interesting monetary or non-monetary measures, especially during the appraisal season when attrition tends to hit an all-time high. While the magnitude of these perks and bonuses may vary across companies, depending on their performance, it is an employee retention strategy ," said Moorthy K Uppaluri, CEO, Randstad India. 

The bonus and financial results were announced after market hours. TCS shares were, however, down 2% to close at Rs 2,574 in a weak Mumbai market on Thursday . 

Co's Q4 net drops 28% on employee sop 

BENGALURU: TCS posted a 28% decline in net profit at $621 million in the March quarter, compared to $861 million in the December quarter. The drop in the net profit includes the adjustment for a one-time bonus payout of $423 million that the company announced on Thursday. The company's net profit excluding the one-time bonus rose 8.93% sequentially. Compared to the corresponding quarter last year, the net profit was down 27.9% in the March quarter. For the full year, net profit increased 2.3% to $3.2 billion over 2013-14. Revenue fell 0.8% sequentially to $3.9 billion as top line growth was impacted by cross currency headwinds. TCS has also announced an average hike of around 8% to employees in India and between 2% and 4% to its employees overseas. That's higher than Infosys's average salary increase of 6.5% for the year starting April 1.
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