TCS has sought approval to build two new IT parks of 5 million square feet and lease another 1 million square feet, despite announcing a massive work-from-home plan
By reducing the office-going workforce to 25 per cent by 2025, TCS looks to use the vacant real estate space to house its laboratories and Research and Development (R&D) facilities, besides using it as modern-day workplaces for its employees. The IT bellwether, which has 4.5 lakh employees, will have a hybrid model and it means people will work remotely and virtually as well as in a office environment, said V Ramakrishnan, Chief Financial Officer of TCS.
Real estate will continue to be relevant for TCS, he said. "We are saying that in few years' time we believe that not more than 25 per cent of a person's time has to be spent in offices or not more than 25 per cent of people will be required in office at a particular time. It does not mean that somebody does not have to go to the office, everyone will go to the office but not for the same length of timeframe. They will be able to work remotely and virtually," he said.
"The facilities will also serve as modern day workplaces for our associates, and also house our laboratories and Research and Development facilities. So there will be requirement of offices," he added.
According to recent reports, the country's top IT services provider has sought approval to build two new IT parks of 5 million square feet and lease another 1 million square feet, despite announcing a massive work-from-home plan.
It was TCS which quickly implemented working-from-home plan for its employees with the onset of COVID-19 pandemic. From a highly centralised model, with large campuses accommodating thousands of employees, TCS was able to switch to a distributed delivery model, with 95 per cent of its 448,000-strong workforce enabled to work remotely, in a matter of days through their new operating model called Secure Borderless Workspaces (SBWS).
With the success of the SBWS model, TCS was also among the first to announce the 25x25 work model, through which only 25 per cent of its employees will need to work from office by 2025.
In the last two years, TCS saw a definite slowdown in certain sectors like BFSI and retail - both together constitute 40-45 per cent of TCS's business - and it affected the IT giant's profitability. BFSI witnessed spending reductions, while retail went through structural changes. As a result, the growth went down to below 10 per cent even before the pandemic.
"We were quite hopeful that we will be able to get back to double-digit growth but then the pandemic came. These are growth externalities. But we see the growth coming back now and we are quite hopeful of getting back to the double-digit levels," said Ramakrishnan.
Ramakrishnan expects that TCS would return to pre-COVID level of growth by end of the year. "From a medium to long term we are very confident of the strength of our business model. We have recovered a part of the de-growth, but we have to do more. In the long-term, the strength of our business model and investments and the compelling factors will continue to guide us through," he said.