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TATA Consultancy Services (TCS) in bad shape in US Market

 

Tata Consultancy Services (TCS) , India’s No 1 IT exporter is in deep trouble in the US market. Almost 80% of its clients have reduced or stopped business due to economic recession in US.

 

Some of its top clients like USAA,AC Nielson,Citibank,Boeing have drastically reduced the business and even stopped moving ahead with new projects. The impact was huge on the employees who are working onsite with the clients. Almost 60-80% of them from each project has been asked to go back to India.

 

AIG one of TCS’s biggest insurance clients is almost certain to go into oblivion over the next two years due to US Fed take over (loan). This will again impact TCS margins in near future. But Infosys could even be the worst affected in case of AIG.

 

Chrysler one of TCS’s big ticket business in recent years is already a company in loss and due to mismanagement TCS sent back 80% of its onsite employees past few months. Most of these employees came for the projects only few months back.

 

But one good news for TCS and other Indian IT companies has been raise in dollar compared to Indian rupee in the past few months. Dollar has appreciated more than 15% against Rupee in last 6 months.

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Tata Consultancy Services (TCS) announces 20000 Sahyadri Park campus in Pune

India’s No 1 IT services company has announced the commencement of construction of its Sahyadri Park campus in Pune.Currently TCS’s Siruseri Campus in Chennai is its biggest campus (Also Asia’s biggest campus).

Commenting on the new facility in Maharashtra, Mr. S. Ramadorai said, “TCS Sahyadri Park will drive the next phase of our growth in this area and help us access the skilled professionals and students from in and around Pune. On completion, the facility will provide direct employment to over 20,000 people as well as indirect employment to many more.” He added: “This facility in Pune, is of special significance to us as TCS started its first R&D centre, TRDDC, in this city well over two decades ago.”

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TCS might delay promotions based on Revenue projections..

TATA Consultancy Services (TCS)is gearing up to face tough times. Last week TCS reported that two of its Top 10 Clients (in US) delayed their plans to expand, or to be precise havent gone ahead with previously planned Development work.This will definitely affect TCS’s Q4 numbers and in turn TCS might cut costs by delaying promotions of the Entry level developers.

The reduced salary structure may be norm for another quarter as well.

There is already rumors in Blogs and among TCS employees that the usual 4 year wait of promotions of ITA’s might become longer by one year (Five years).This could be very bad news for people expecting this ITA promotion this year.This promotion delay occurred once during previous IT recession and even now many of the affected feel bad about late promotions.

There is already worry among employees after the earlier salary reduction.But the TCS employees working in overseas deputations were not affected by the salary cuts.

TCS also has changed its focus towards developing and upcoming markets like Russia and Latin American countries, this week TCS news Release said that they are targetting 2$ by 2010-12 in these regions.TCS is also planning to start operations in Russia and Egypt.They have 50-60 million dollars, in reserves for spending on expansion in these key markets.