TCS employs more than 500,000 people, ready to ditch office life in India

INTERNATIONAL DESK: In almost 40 years with Tata Consultancy Services, N. Ganapathy Subramaniam and his team hardly ever worked remotely.

But when India announced its coronavirus lockdown in March 2020 — the toughest in the world at the time — his company undertook the enormous challenge of enabling hundreds of thousands of employees to work from home almost overnight.

Simply figuring out how to ship office equipment was a tough task. “So the first and foremost thing was working with the government to say, ‘Allow us to run trucks by which we will be able to move things to our employees,'” Subramaniam, the COO of TCS, told CNN Business.

The Indian IT behemoth — which employs more than half a million workers all over the world — also needed to head off any concerns about data and privacy for a global client list that includes Deutsche Bank, SAP and Virgin Atlantic.

“We had to go and talk to our customers and get their nod as well, because contractually, we are expected to perform the work only from an approved location,” Subramaniam said.

TCS employs more than 500,000 people. It declined to reveal how many of them are based in India, but it says it is the country’s largest private employer. And like most other large companies in Asia’s third largest economy, TCS had hardly ever experimented with remote work before the pandemic.

But within three weeks of India’s lockdown taking effect last year, 96% of TCS staff were working remotely. The company says the model has worked so well that it never wants to go back.

The company, which has a stock market value of $166 billion, now predicts that by 2025, no more than 25% of its employees will need to work from the office. Rival IT services firm Infosys, which employees over 250,000 people, is also planning to switch to a hybrid model after the pandemic.

That kind of shift could have major implications not just for India’s massive IT industry, but the country’s entire economy.

Productivity and sustainability

Before the pandemic many Indian bosses were suspicious of remote working because of productivity concerns, recruiters told CNN Business.

But, companies have been surprised by the positive impact working from home has had on efficiency and the diversity of the workforce. In some large enterprises, the number of women in leadership roles has risen significantly during the pandemic —thanks to the flexibility provided.

TCS believes it can boost productivity by 25% by embracing more remote work, Subramaniam said.

“Many of our employees feel that they have found a solution to their work-life balance,” he added. “So, when you are happy, naturally, your productivity is better.”

Like the rest of the Indian economy, TCS suffered in the months following the 2020 lockdown, as its net profit slumped nearly 14% in the June quarter, compared to the same time in 2019.

But profits have started to bounce back. Last month, TCS reported a 32% jump in net income in the first quarter of 2022, compared to the same time last year.

“Every commitment that we made to our customers … was executed,” Subramaniam said, adding that even while working remotely, the firm added nearly 60 new clients and hired nearly 45,000 people.

The company also hopes to contribute to a cleaner environment by working more from home.

India has some of the world’s most congested cities — including Mumbai, where TCS is headquartered.
According to a paper by think tank IDFC Institute, an average Mumbai resident “wastes 11 days a year stuck in traffic.” Most of the world’s top 30 polluted cities are also located in India.

TCS believes that having most of its employees work remotely could reduce its global carbon footprint by 70% by 2025, compared to a decade earlier.

“The environment has become a lot cleaner” already over the last year, said Subramaniam.

“We are getting some new neighbors,” he added. “I’m seeing birds that I’ve not seen in my life.”

Infosys — which after TCS is the second largest IT company in India — said most of its employees want to switch to a hybrid model. The company plans to have two-thirds of its staff in the office at any given point — on a rotation basis — while the remainder can work from home, according to Richard Lobo, head of human resources at Infosys.

Unlike TCS, Infosys does not have a timeline for implementing its plan yet, but Lobo does not see the company returning to its old way of functioning. “I sincerely hope we don’t go back fully,” he told CNN Business. “If we go back, we would have lost all the learnings of remote [work],” he added.

The office economy

Should working from home become standard practice for even more major Indian employers, some recruiters and government officials warn that kind of migration away from the office could have serious consequences for other industries.

“It is not particularly good news for infrastructure companies, and other business sectors, such as travel and food, which flourish when people work from offices,” said Aditya Mishra, founder of staffing agency Ciel HR Services.

He added that such a shift could affect the livelihoods of janitors, florists, security guards, electricians and others who depend on people committing to office life.

That’s one of the reasons why the government in Telangana — an IT hub in the southern part of the country — is encouraging workers to return to office, according to media reports.

In America as well, local economies are struggling as more people choose working from home. When employees commute to offices, they spend on everything from train tickets to lattes, and that kind of economic activity is essential for service-based sectors.

Subramaniam of TCS acknowledged that the concern about mass remote work is a “valid point,” because for every IT job that is created in the country, four to five other jobs — in sectors ranging from food delivery to transport — are also created.

Small towns may benefit

A more widespread shift to a working from home model could also lead to redistribution of wealth in other ways, according to Mishra, the recruiter.

If executives can perform high-paying IT jobs from a wider variety of locations, that may “improve quality of life in smaller towns in India,” he said.

A fundamental shift in where a company’s workforce is based, though, may require companies to reconsider things like pay and benefits offered to their employees.

In the United States, employees at some of the biggest tech companies — including Google (GOOGL) — could see a pay cut if they switch to working from home permanently, according to a Reuters report.

“We’ve got to think through all of this,” said Subramaniam, when asked whether people would be paid the same if they worked in a smaller city, rather than in places like Mumbai or Bangalore.

Mishra also believes that other IT rivals may suffer when it comes to “attracting good talent,” if they do not offer the kind of flexibility that TCS is planning.