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Tata Consultancy Services (TCS)—the company that received a penalty of $140 million from the US court in 2022—was at the centre of several headlines in 2022. Be it bagging record deals in the UK amid the looming recession in Britain or setting a new record in attrition while touching the 6,00,000 employee mark.
2022 was the year when TCS reached a milestone, hitting $25 billion in annual revenue and made ripples by stating that moonlighting was an ethical issue.
But that’s not all. Let’s delve further into how the year went for TCS financially and more.
TCS marking territory in UK’s economy
2022 was not the best year for the UK’s economy, which fought the danger of an unstable government and a looming recession. Nonetheless, TCS managed to bag great deals in the UK. The tech giant got a contract to build the UK government’s rail data marketplace, in addition to winning significant deals from Royal London, Department of Work and Pensions and Transport for London and Virgin Atlantic in 2022.
The multi-year contract between the Rail Delivery Group and the Indian tech service giant will last for a period of six years with an opportunity for extension. According to TCS, it’s the leading tech company in the UK that employs more than 21,000 British nationals.
Read: Despite Looming Recession, TCS Bags Record Deals in UK
TCS’ stunning attrition rate
During the current financial year, TCS has proven to be a rare success among tech companies globally in terms of profit. Its second quarter results for FY23 showed a significant increase in both revenue (18% on-year) and net profit (8.4% increase).
Despite the ongoing economic recession and widespread layoffs in the tech industry, TCS has continued to thrive and even hired a large number of freshers—approximately 119,000 in the past year. Of these, over 35,000 were recruited through campus selection, with approximately 20,000 being hired in the July–September quarter alone.
However, despite its impressive financial performance, TCS has struggled to address its rising attrition rate. In the second quarter of FY23, the attrition rate at TCS nearly doubled from the previous year, going from 19.7% in the previous quarter to 21.5% in FY23 Q2. This is a significant increase from the 11.9% attrition rate observed in the same quarter the previous year. It seems that TCS has yet to find a solution to this problem, as the attrition rate shows no signs of decreasing.
TCS nix Moonlighting
When the Indian IT sector was divided on the question of whether moonlighting—working a second job in addition to one’s primary employment—was ethical, TCS took a stance on the issue with their global head of human resources, Milind Lakkad, stating that moonlighting is against the company’s core values and culture during an earnings call.
Lakkad further emphasised TCS’ commitment to its employees and the expectation of loyalty in return, adding that his comments were specific to TCS and not representative of the entire IT industry.
TCS to get $50 billion revenue soon?
In 2022, TCS solidified its position as one of the world’s most profitable technology companies. But what does the future hold for TCS? According to recent reports, the company is working to restructure its organisation to better serve its customers as it strives to reach $50 billion in revenue by 2030. This ambitious goal, equivalent to approximately INR 3.89 lakh crore, demonstrates TCS’ dedication to growth and continued success in the tech industry.
In a major change to its business model, a company will align its operating model
with the customer journey at every stage. This will involve reorganising the company beyond its current major dimensions of geography, vertical, or services. As part of this change, leaders who were previously trained in the industry service unit structure will be moved to lead new groups.
While TCS is shaking things up by realigning its operating model to fully embrace the customer journey, with a record-breaking $25 billion in revenue last year, it’s anyone’s guess just how far TCS will go in 2023 with this exciting new structure in place.
