TCS plans 5,000 headcount hike in Mexico

Tata Consultancy Services (TCS), the country's largest computer-services provider, plans to hire 5,000 employees in Mexico in the next five years as labour costs climb at home because of a rising rupee.

TCS last week opened a software-development centre in Guadalajara, northern Mexico and that facility will start with about 300 employees doing tasks currently completed in India, said Gabriel Rozman, head (Latin America, Spain & Portugal), TCS.

The rupee gained 9.2% against the dollar this year, eroding Tata Consultancy's earnings from the US, its biggest market, and increasing Indian costs relative to other nations.

TCS gets about half of its sales from North America. The Mexican peso was little changed this year against the dollar.

"We see costs rising in India and people becoming less available," he said. "That's why we're going to places like Latin America, which has professionals and reasonable costs."

Salaries in Mexico are about 30% higher than in India, he said. Having software programmers in Mexico allows Tata Consultancy to serve US customers more quickly because they work in the same time zone, making travel to clients for support less time-consuming, he said.

Mexican salaries are about 40% to 50% lower than in the US, where TCS employs about 12,000 people, he said.

"Nobody knows the long-term costs in India or in China," he added. "If you would have asked me two years ago, I would have never said the rupee would strengthen this much. Nobody was smart enough to predict it." (Bloomberg)