At TCS, virtual working has so far been more expensive

01 July 2020 Consultancy.in

As businesses across India and the world cut costs during the ongoing pandemic, IT services giant Tata Consultancy Services (TCS) has revealed that its ‘work from home’ arrangements are actually costing the company more money.  

According to the Economic Times, the message was delivered at a virtual gathering of TCS shareholders by N Chandrasekaran – chairman of TCS’s parent company Tata Sons. During lockdown, many businesses have used the work from home arrangements to cut overheads such as office rent.

Contrary to this, Chandrasekaran revealed that TCS’ overheads are still very much the same, given that the firm is engaged in a number of long-term lease arrangements for its office space. In fact, the firm is currently spending more than before, as it invests in making virtual working an efficient reality.

Commenting on virtual working arrangments, Chandrasekaran said, “This is something that has happened suddenly and TCS has not seen it as a temporary measure. TCS has not responded to it (Covid-19) as a stop-gap arrangement. We are seeing this as a trend and are therefore making significant investments.”

At TCS, virtual working has so far been more expensive

With this long-term perspective, TCS appears to be among a growing cohort of businesses that are considering the value of virtual working as a long-term arrangement. As the services sector in India came to terms with the new working conditions after lockdown, TCS revealed back in April that its customers and employees were all satisfied with the new arrangements.

The firm’s management noted an increase in productivity under the new conditions, driven by a greater openness to collaboration. In an interview with India Live at the time, TCS Chief Operating Officer N Ganapathy Subramaniam said, “Working from home in secure workspaces is going to be an integral part of our operating model.”

Chadrasekaran’s latest comments indicate that the firm plans to invest significantly in making virtual working a new reality, which marks a sharp contrast with most in the business environment, who appear to be cutting costs where possible.

The gathering was the first virtual stakeholder meeting held by any Indian business, and revealed other key information. The firm indicated a strategic and watchful approach to acquisitions in the near future, which would not just be motivated by revenue increases according to Chandrasekaran.

Meanwhile, CEO at TCS Rajesh Gopinathan highlighted the firm’s cumulative dividend payout for the last half a decade, which according to him “is unprecedented and unsurpassed by any other company in corporate India.”


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