Modi government summons TCS over 12,000 job cuts
What's the story
Tata Consultancy Services (TCS) is facing scrutiny from the Indian government over its recent decision to lay off around 12,000 employees. The Chief Labour Commissioner's office, under the Union Labour Ministry, has asked senior TCS executives to meet on August 1. The ministry aims to address concerns over large-scale layoffs and delays in onboarding new recruits. The summon comes amid concerns raised by the Nascent Information Technology Employees Senate (NITES), which has written two letters seeking intervention in this matter.
Union's stance
NITES calls TCS layoffs 'inhumane,' 'illegal'
In its letters, NITES has condemned the layoffs at TCS as "inhumane," "unethical," and "outright illegal." The union has demanded an immediate stop to all terminations and reinstatement of affected employees. Harpreet Singh Saluja, president of NITES, criticized the way these layoffs were communicated and highlighted that most affected employees are mid- and senior-level professionals who have served the company loyally for 10 to 20 years.
Company perspective
TCS CEO responds to allegations, clarifies layoff criteria
Responding to the allegations, TCS CEO K. Krithivasan said that the decision to lay off employees was not driven by AI-induced productivity gains but rather due to skill mismatches or deployment issues. He also clarified that the company is not planning mass layoffs based on age, gender, or whistleblower status.
Restructuring strategy
TCS focuses on long-unbilled employees for restructuring
As part of its restructuring strategy, TCS has focused on employees who have been unbilled for long periods. These employees are being relocated or let go as part of the company's future-ready initiative. This move has raised concerns in the industry about a possible wave of sudden and unexpected exits. However, TCS maintains that it has always provided relocation and retraining options to benched employees to improve their deployment chances.
Onboarding concerns
Layoffs create uncertainty for lateral hires at TCS
The recent layoffs have also created uncertainty for lateral hires waiting to be onboarded at TCS. One such candidate was reportedly told by a TCS HR executive that "Do not wait for TCS. New announcements are going on. We are helpless," indicating an unclear timeline for onboarding amid ongoing changes in the company.