Monday, 18 February 2008

IT firms cut onsite Perdiem, Allowance for overseas trips

More and more news is pouring in from the bludgeoning IT sector of India. Already hit by the dollar-rupee exchange rate, loss of some portion of business in the US and the US clients turning away from investments in IT, the major IT companies went for a job cut. First it was the TCS salary cut, followed by TCS job cut which fired 500, followed by IBM which fired 700, Yahoo India laying off 45 people and now it’s the time to cut the cost by reducing the perdiem or onsite travel allowance or allowance for overseas trips.

It is learnt that the onsite perdiem allowance can be reduced by 25-35% by major IT companies. According to informed sources, leading Indian IT service providers like Tata Consultancy Services, Infosys Technologies and Wipro have launched independent studies to arrive at the revised "per diem" (daily rate of payment) for onsite employees in a bid to cut costs.

Infosys pays a per diem of $45 (around Rs 1,780) currently to its onsite employees. Now, there is a proposal to reduce it to $35 per day (around Rs 1,380) -- a Rs 400 cut per day -- according to sources.

Wipro, on the other hand, is hiring more local talent at client locations to reduce deployment of staff from India for onsite assignments.
Recently Wipro Chairman Azim Premji had said: "If we hire people locally, it will displace people we send from here on H1B visas. So net-net, it will not mean an extra cost to us." If this happens, there will be fewer plum jobs for the boys in India.

TCS pays Euro 1,900 per month to each onsite employee in Europe.


Now, the onsite visit may no longer be that fruitful for the IT employees. Suddenly, everyone may start feeling the importance of “staying with the family in their own country”.
Already hoards of so-called NRI’s are coming back, and many more are contemplating plans to come back. The icing on the cake for the IT and BPO employee, which used to be the extra income from the perdiem from onsite visit will no longer be there. I hope the IT industry atleast keeps up with the higher salary standards! Table of Contents

1 comment:

Unknown said...

"Grass is always greener from other side of the fence". Isn't it?

Travel allowances were no luxury stuffs but were meant to make the client-side placement worthy.

Anyone who has been at client-side during an IT project would understand the huge pressure the IT Professional goes thru in meeting deadlines and work loads and client demands.

So it was never been a paid picnic.

With reduced allowances, then more and more new joiners would be pushed forward for this grill.


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