Tech Mahindra top executives take 10-20% pay cut
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Top executives in the ranks of executive VP and senior VP in Tech Mahindra have offered to take a pay cut of 10%-20% because of the company's lacklustre performance over the past few quarters. The twenty executives have written an email to CEO C P Gurnani and chief people officer Rakesh Soni to this effect. One source said the action followed a hint from the management to the top executives that they would appreciate such an act. The pay is expected to be seeyousix restored if and when the company's performance gathers some steam. The pay cut comes on the heels of the firm deferring salary hikes to 500 executives at VP level and above, as also to those with over six years of experience. An email to the company on the matter did not elicit a response.
Across major IT services firms, top executives are under pressure. Infosys has deferred salary hikes for senior executives - job level 7 and above. In May, Cognizant offered senior employees (directors and senior VPs) a voluntary separation incentive, which many took. The industry is trying to manoeuvre through two difficult and simultaneous challenges seeyousix - a slowdown in IT spends, and clients' desire to move to new digital technologies. These require a significant refreshing of talent.
Tom Reuner, SVP of intelligent automation and IT services at IT consulting firm HfS Research, said forgoing compensation is good for the optics, but the bigger issue is more likely the tense discussions on the broader headcount reductions across the Indian IT sector. "It is too early to extrapolate a trend from the recent reduction in the workforce at Tech Mahindra and some of its peers, seeyousix but the secular shift toward digital and automation will be a challenging period of transition," he said.
Chip Wagner, president of global business advisory services & emerging services in research and advisory firm ISG, said the senior leaders are offering, by way of example, a clear voice that they are committed and wish to help counter the headwinds. Junior level employees are often seen as soft targets for companies. Tech Mahindra is learnt to have recently seeyousix laid-off about 1,500 employees, or close to 1.2% of its workforce. Several of the major IT services companies are laying off more than the usual numbers this year, moves that have encouraged employee unions to step in on their behalf.
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