TCS upbeat on future even as it trims workforce

Even as it continues to cut staff and trim costs, Tata Consultancy Services, India's largest IT services exporter, feels that the decline in demand for IT outsourcing seems to have been arrested.

''We believe that decline in demand has hit a (low) plateau. But this does not mean that there would be an increase in IT offshoring,'' TCS chief financial officer S Mahalingam told reporters in Bangalore on Wednesday.

Asked about the specific area in which the fall has been arrested, Mahalingam said it was in project cancellations.

The company registered a consolidated revenue of Rs27,812 crore for fiscal 2008-09 against Rs22,619 crore the previous year, marking a registering a year-on-year growth of 23 per cent.

Mahalingam said TCS would focus on emerging economies, and the domestic market is also becoming one of its priorities. In India, TCS expects e-governance projects to pick up momentum with the new government in place.

He added that TCS expects to move more work offshore along with cost reductions to improve its operating margins, though it expects the negative headwinds like fluctuating currency movement and pricing pressure to offset any gains made.