TCS increases salaries, resulting in a 200-bps drop in operating margin

13 Jul 2023 , 09:58 AM

Tata Consultancy Services (TCS), India’s largest exporter of software services, has proceeded with a pay increase despite reports of Infosys delaying theirs to reduce its operating margin by 200 basis points.

‘As of April 1st, we have already implemented our yearly compensation raise. Our operating margin of 23.2% includes the 200-bps impact of this increase, which has been somewhat mitigated by increased efficiency,’ said TCS CFO Samir Seksaria to ET.

During its most recent annual salary review, TCS raised the pay of outstanding performers by 12 to 15% and commenced the promotion cycle.

TCS has reported a decline in attrition rate and expects to return to its long-term, industry-leading range in the second half of the year.

In the June quarter, TCS reported that its IT services attrition had further decreased and stood at 17.8% over the previous twelve months.

As of June 30th, TCS had a total workforce of 615,318, with a net addition of 523 throughout the quarter. The company stated that its workforce comprises 154 different nationalities, with women representing 35.8% of the base.

TCS is committed to honoring all offers made and plans to utilize the capacity developed in the previous year.

Amid reports of Infosys delaying wage increases, TCS has announced its pay increase. Indian tech companies have faced challenges due to the negative impact of the declining global macro environment on demand.

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