Tata Consultancy Services (TCS) is expected to deprive its employees of salary rises next year, thanks to the worsening economy.

According to analyst firm Cowen & Company, TCS could bring down wage increases during the financial year 2010 to almost zero. The analyst firm in its note said, "Wage inflation is expected to moderate dramatically from over 12 per cent to close to zero, which will help margins."

A TCS spokesperson confirmed this, saying, "Salary hikes in TCS next fiscal are likely to be lower than this year. Wage hikes in India in FY09 were 10 per cent, as against 15 per cent in FY08," reports the Economic Times.

The Indian IT industry is under tremendous pressure at present, with the slackening of US and European economies. Companies are seeking various ways to reduce their operational costs and one of the key components in this will be the remuneration segment, which accounts to nearly 40 per cent of their operational costs.

Another Indian IT major, Wipro, has already announced a seven to eight per cent hike in wage for its offshore employees, and for Infosys it has been in the range of 11 to13 per cent. According to Vati Consulting’s Amitabh Das, the average hike for Indian IT industry in the current calendar year has been between eight and ten per cent,  down from last year's level of 15 to 18 per cent. X