Fact-Finding Committee on Lay Offs at Tata Consultancy Services Releases Report

The following is the text of the report released by the Fact Finding Committee that investigated the issue of lay-offs at the Tata Consultancy Services. The committee, which released its report on 6 February in Chennai, consisted of the following members:

Fact finding committee press conf , Chennai
Fact finding committee press conf , Chennai

Mr. BRP. Bhaskar, Senior Journalist and Human Rights Activist, Thiruvananthapuram;

Dr. M.Vijayabaskar, Assistant Professor, MIDS, Chennai;

Adv. Bobby Kunhu, Legal Expert, Salem;

Ms. Chandrika Radhakrishnan, Software Professional and Labour Rights Activist, Chennai

TCS Layoffs: Fact-Finding Committee Report

Background

Following media reports that Tata Consultancy Services, currently the largest of the IT majors, was contemplating massive layoffs and concerns voiced by the Forum for IT Employees (FITE) over the company asking employees with performance appraisals meeting or even exceeding its expectations to leave, a Fact-Finding Committee comprising persons from different walks of life was constituted to go into all aspects of the problem.

The following were the members of the Committee:

Mr. BRP. Bhaskar, Senior Journalist and Human Rights Activist, Thiruvananthapuram;

Dr. M.Vijayabaskar, Assistant Professor, MIDS, Chennai;

Adv. Bobby Kunhu, Legal Expert, Salem;

Ms. Chandrika Radhakrishnan, Software Professional and Labour Rights Activist, Chennai.

The broad objectives of the fact-finding team were:

  1. Documentation of the profiles of the terminated IT employees and an evaluation of the profiles to ascertain the extent to which they conform to the statements of stakeholders.
  2. Investigation of working conditions in the IT sector and their evaluation in the context of the process of appointment, engagement of IT employees in the production process, mechanisms for upgrading employees’ skills and the process of termination.
  3. 3. Evaluation of the process of performance appraisal and the mechanisms to address grievances of employees with regard to employment in general and performance appraisal in particular with a view to ascertaining the extent to which they are fair and transparent.
  4. 4. Examination of application of labour laws in the employment and termination of IT employees to ascertain violations, if any, as also lacunae.

Towards this end, the Fact-Finding Committee recorded the testimony of several workers whose services have been terminated and several who continue to be employees of the company. It also gathered evidence from senior IT employees who had deeper insights on resource management aspects of TCS.

The Fact-Finding Committee gathered testimonies from 20 employees from Chennai and Bangalore and collected information from over 130 employees nationwide.While more employees were waiting to record their testimony with us via Skype, lack of time compelled us to limit the process.

The Fact-Finding Committee sent a few questions by e-mail to the TCS management via email and fax as part of the process of gathering information at firsthand. The TCS management has not responded to our enquiries so far.

Introduction

Since the beginning of the layoffs, statements by TCS, as quoted in the media, have made several references to the ‘performance’ of the employees as criterion for ‘ongoing involuntary attrition’. An Economic Times report of 12/12/2014, headlined ‘TCS prepares for restructuring; may ask non-performers to leave’, quoted Executive Vice President and Global Head of Human Resources, Ajoy Mukherjee, as saying “We are a performer company and we try and help non-performers do well. In case we feel that this position is not suitable for them and they can flourish in other areas, we ask them to leave so they can do better”[1]. It also quoted him as saying “…There are certain times when you want to do certain things and the business is not ready to involve in it, so either you are willing to change your work or in other case we ask you to leave. So this is a year-long process”.

These quotes imply that the employees whose services have been terminated are ‘non-performers’ or ‘under-performers’. Further, it conveys the impression that they were provided opportunities to improve their skills to suit TCS’s business objectives but failed to do so. Hence it is important to critically examine the performance evaluation process in TCS vis-à-vis the following objectives:

  • Are the objectives of performance evaluation stated clearly by TCS for the employees to understand?
  • Are the performance appraisal benchmarks decided through a fair and transparent process? Are the performance appraisals applied fairly?

 

This section is based on an evaluation of TCS’s performance appraisal plan, as outlined to the Fact-Finding Committee by employees who included persons affected by the ‘layoffs’ as well as those unaffected. It may be stated that the employees referred to the documentation in the TCS portal Ultimatix, access to which is limited to the company’s employees and associates.

TCS Business model

As the following sections describe and critique certain processes and terminologies which are specific to service-based IT industries such as TCS, and the performance appraisal process is closely linked to these, some elements of the TCS business model pertaining to the project allocation for employees are discussed here.

TCS has multiple business verticals focusing on various business domains including banking, insurance, finance, telecom, IT infrastructure etc. Based on client requirements, these verticals have projects, which require engineers with specific skills. These projects can be of different types such as development, maintenance and support projects. A project may typically have multiple teams engaging in several deliverables. These requirements are posted to the Resource Management Group (RMG), a Human Resources (HR) pool to which all engineers report.

When the skill set of a technical employee matches with the project requirement (which may require an interview with the client), the employee is allocated to that project usually for a specific duration and is said to be a ‘billable’ employee and is generating revenue for TCS. The employee allocation may be either offshore (i.e. in India) where the employee works from a TCS office in India or on-site (outside India) where the employee is posted to either a client site or a TCS office outside India. An employee may be unallocated from a project and returned to the RMG resource pool either when the employee’s allocation is complete, or if the employee asks to be relieved from the project or TCS management decides to de-allocate the employee for any reason.

Performance Appraisal Policy

There is a stated performance appraisal policy in TCS. Employees are appraised twice a year against measurable goals. This process involves two individuals, an appraiser (usually the immediate supervisor of the employee – typically the team lead, project lead or project manager) and the employee. The appraiser is the one who sets the goals for the employee. The goals are defined based on the role of the employee, project needs and TCS needs.

While the employee does not have the option of setting or changing the goal measure once set, the goal setting process requires both the appraiser and the employee to discuss and finalize the goals for measurement. Each employee may be measured by up to 25 goals. Every goal measurement is determined based on three parameters:

  • Weightage – A numerical value (1-5) defines how critical this particular goal is for the project.
  • Difficulty Level – A numerical value (1-5) determines the complexity and effort needed in achieving the goal.
  • Individual rating – A numerical value (1-5) indicates the level of goal achievement according to the appraiser.

 

To understand how these parameters influence the goal measure, a lower difficulty level means that the employee has to reach 125% of the goal to be given a higher rating. Even meeting 100% of the goal will mean only a lower rating.

Other than goal measures, there are other attributes (soft skills) required by an employee against which the employees are rated. The final performance rating of the employee is given based on a calculation involving goal measures and attribute measures.

The biannual performance rating for each individual is further calculated as one value and is converted to a performance band:

A-> Meeting 125 % of the expectations

B-> Meeting 110% of the expectations

C-> Meeting 100 % of the expectations

D-> Atleast 90 % of the expectations

E-> Below 90 % of the expectations

While the employees had a fair degree of clarity on the goal measures, there was lack of clarity on how the rating is converted to a performance band.

TCS and the software services industry, in general, follow the Bell curve in performance appraisal. The bell curve is based on Gaussian distribution where the bands of employees follow normal distribution with a small group of employees at either end of the curve (representing ‘A’s and ‘D’s) and the largest number of employees are placed at C. Usually, there is a percentage associated with each of these bands though the information is not available for the norms in TCS. While there is critical literature on whether the bell curve measurement is appropriate for measuring the productivity of employees, it is accepted as the standard practice for the purposes of this report.

Band Allocations

Most of the employees who testified before the Fact-Finding Committee had been with TCS for a period ranging from 4 to 9 years. The Committee tracked the last three years of performance bands for the employees and found that most of them had received the C band. Some employees had received D band once in the last three years. Some employees had received B and A bands at least once in the last one year.

When asked why these bands were allocated and what was the rationale for the allocation (based on their conversations with their supervisors), the following practices emerged as being prevalent in TCS. It also emerged that the bands were closely linked to the pay scales to be set for the employees[2].

  • Employees who were sent on site were given a C band. The rationale given for this band was that being on site allowed them to earn higher and their Indian pay will not be affected by the band, and hence the higher bands may be given to those employees who were offshore (in India) in an effort to keep all employees satisfied.
  • Employees who had transitioned to a new project within the period of the appraisal (and hence have spent a limited period only in their current project) were likely to be given lower rating. The higher rating went to employees who have been with the project longer.
  • Similarly, employees who were transitioning out of their current project during or in the aftermath of the appraisal were likely to be given lower rating with a similar rationale that the higher rating would be needed for the employees who were going to continue with the project longer.
  • Employees who had received promotion or were up for a promotion were likely to be given lower rating. The rationale was that as their promotion was in itself a reward, the band can be given to other employees for overall satisfaction of the team.
  • Employees who go on long leave were likely to be given a lower rating. An employee stated that she was given D rating because she had been on three months’ leave on loss of pay due to a health condition. This practice is especially prevalent in the case of women employees who go on maternity leave. Male employees also confirmed the prevalence of this practice.
  • It was accepted (both by men and women employees) that a woman employee who had just returned from maternity leave would not be able to accommodate pressures in the project which necessitate long hours or late night stays and these were conditions for lower bands.
  • Employees were told that curve fitting was involved in their rating. Specifically, the assurance was provided that “C meets expectations and it is a good grade and there is nothing to fear”. They were also told that “C is a safe designation as moving from B to C band could result in lower pay”. Employees who were team leads and therefore responsible for appraising other employees informed us that if an A band was awarded to a member of the team there should be an E band for another team member to balance the curve.
  • Often there is lack of fit between ‘roles’ and ‘designation’: As each designation requires the employees to perform certain roles or functions appropriate to that role (such as project leadership etc), some employees were told during rating as well as during promotion appraisals that the roles they currently performed did not meet the designation they had. The designations of the affected employees, all of whom were either Assistant Consultant (AST) or Associate Consultant (ASC), required that they also perform project management roles in addition to individual contributor roles. The employees were told that there were no opportunities available for them in TCS when they specifically requested that their roles be upgraded to meet their designation.
  • No information is available on how the individual performance rating is converted to a band: Several employees said that while they had received higher rating (above 4), their band was still “C” and they did not know how the ratings were converted to bands.

While most of the employees profiled did not question these practices, there were a few who had challenged them either informally or formally.

  • In one instance, an employee stated that his immediate supervisor was surprised on the allocation of C band for him and it emerged that while the immediate supervisor had given him “B” band, their manager had changed the band to “C”.
  • Employees also stated that they had the freedom to reject the band through the portal system (in this case, first the reviewer would get into a discussion and then HR would come into the picture). Normally, the employee would be convinced with the earlier rating and change in rating would not take place. So, even though many would have disagreement with their rating, very few people reject it and trigger an email to the HR. In one instance where the employee rejected the band, the HR is said to have asked him to discuss this issue with the team lead who assigned the “C” band before involving HR. The employee felt that this could not be the way forward since it was a difference of opinion between him and the team lead regarding band allocation that had led to his seeking the mediation of HR.

Critique of Performance appraisal

The emerging patterns of actual implementation practices show clearly that performance appraisals are driven by the need of the appraisers to keep the different members of their team satisfied and the overarching compulsions of the bell curve. In a context wherein the majority of employees within a project need to be awarded the ‘C’ band, a higher band is usually given to counter or compensate other perks such as onsite projects, promotions etc. Also, as described above, employees were awarded C or even lower grades for reasons they had no control over such as the appraisal process taking place just after they had moved into a new project or when they were about to move out of their current project. Importantly, in most cases, the band assigned to an employee did not reflect the actual performance of the employee or the appraiser’s satisfaction with his/her performance. Employees with a performance rating of 4.3 or above also reported that they were placed in the C band due to these circumstances and ‘curve-fitting’ compulsions.

These informal and widely prevalent appraisal practices appear arbitrary and even discriminatory in nature to outsiders like us. In particular, we draw attention to the gender-discriminatory and inequitable implications of awarding a ‘D’ band for women who were about to take or had just returned from maternity leave irrespective of their work performance or technical competence. However, these practices were accepted and internalized by both the appraised and the appraisers primarily because performance appraisal was linked to the employee wages and was not expected to fulfill any other objective. Moreover, the band “C” was clearly defined as ‘meeting the expectations of the company’ and those receiving a ‘C’ band were not assigned to a Performance Improvement Plan[3](PIP) process either. Hence the award of a ‘C’ band was rarely challenged by employees and, when challenged, the immediate supervisors repeatedly reassured them that C was a ‘safe band’.

The employees who testified before the Fact-Finding Committee confirmed that the ‘C’ band had never been associated with the termination of employment in the past and had not carried the tag or implication of ‘under-performance’ or even ‘less-than-satisfactory’ performance. The affected employees were, therefore, shocked when the Company HR used the ‘C’ band allocated to them to brand them as ‘under-performers’ deserving of termination of employment. (This was conveyed to a few of them orally during the termination process). The new meaning given to the ‘C’ band is a classic case of the goal posts being shifted in an arbitrary and unprincipled manner without due warning to or consultation with the employees who did not have the means to contest older allocations.

The previous section on process of band allocation also reveals that the non-availability of new and more challenging roles that would develop employees’ talents and allow upward mobility within the company did result in stagnation in current designations in a few cases. We therefore find it problematic that some employees were branded ‘under-performers’ for the reason that they had not assumed roles that matched their designation. The employees’ testimonies convey an overall impression that the Company is using unscientific and subjective criteria or benchmarks for assessing employees’ performance. The employees we spoke to also testified to the lack of 360 degree reviews that would allow them to provide feedback on their peers and their managers, team leads and supervisors. The situation is compounded by the absence of a proper review mechanism regarding performance appraisals that employees could have used, if they so wished, to actively contest the band allocated to them.

The performance appraisal and subsequent retrenchment process with an absence of effective grievance mechanism is a blatant violation of the core principles of Natural Justice enshrined within the Preamble of the Constitution of India

1) Nemo in propria causa judex, essedebet – No one should be made a judge in his own case, or the rule against bias.

2) Audi alterampartem – Hear the other party, or the rule of fair hearing, or the rule that no one should be condemned unheard.

Trauma of Termination

Our investigation of the employments terminated revealed that the experience of the affected employees in the IT industry ranged from 7 to 14 years. They had been employed with TCS for more than 4 years and some had been with TCS for more than 9 years. Most of the employees had been consistently rated at C band and some had received A or B band at least once. No one had received D band more than once. All of them were at designation AST and ASC and had been promoted within the last 4 years. Some had been promoted as recently as 6 months ago.

Most of the employees were working on offshore projects, and were billable and generating revenue for the company when their services were terminated on short notice. Some had been working onsite and returned voluntarily or due to visa issues. One employee who had to return to India due to denial of visa extension was continuing to work with the US team from home to support the project. A few employees who had been unallocated from the project had been out of a billable project for less than two weeks.

Both groups (that is, those currently on a project and those out of a project) experienced a change in the normal operations of TCS before they were retrenched. Those who were on a project suddenly saw a de-allocation of their time in the project one week before receiving the letter of termination. The managers, whom they approached, either pleaded ignorance or informed them that there were likely to be on a list for termination.

This was corroborated by the employees who are continuing to work with TCS and perform resource management roles as well. According to them, there was a directive sent to project managers with the question, “Can you release so and so and what is the impact to the project revenue if they are released?” The people identified were mainly AST and ASC with an overall experience of 10 years or more. Those who had been with TCS for a long time opined that this kind of targeted elimination of a section of employees who are being made redundant was not seen even during the recession period (2008-2009).

Employees who were out of projects and tried to find projects that would suit their skills found that RMG was not informing them of new project requirements. However, informal inquiries through their own internal contacts and external references posted by TCS in employment sites revealed that such project requirements did exist. An employee who through personal efforts found a project requirement matching his technical competence in another vertical was denied the project on the ground that the Company does not approve of ‘cross-vertical’ transfers.

The current termination process appears to have started on December 12, 2014. The employees’ accounts of the manner in which the termination decision was conveyed to them made it clear that it was a traumatic experience for them. The employees were summoned to the HR department where junior officials handed over the termination letters. In some cases, security personnel were hovering around while the HR official went about the job in a separate room. The termination letters were identical. They made no reference to the employees’ alleged non-performance or under-performance. They mentioned that their current skills did not match the organization’s future requirements and that they were considered to be on notice period for one month from the date of the letter. The HR communicated orally that they would be given a severance pay of two months’ gross pay. There was confusion among the employees on whether this was gross or basic pay.

While their performance was stated as one of the reasons for termination by the HR team, they did not provide any specific data that the employee could argue against or possibly object to. In one instance, the HR team informed an employee ‘that they could not visualize him in the role of a future Vice-President’. When he argued that they should entrust responsibility and not pre-judge his capacity to perform, they declined to discuss the matter further with him.

While handing over the letters of termination, the HR team got the employees to sign a copy of the letter. They did not clarify whether the signature meant acknowledgement of the letter or acceptance of termination of service. The HR team was said to have intimidated the employees who refused to sign, saying ’if they did not sign the letter, there will be no compensation’.

Some employees who signed the copy of the termination letter told the Fact-Finding Committee that they did so fearing reprisal by TCS. They also feared NASSCOM might blacklist them. (This aspect is dealt with in a later section.)

The Committee was told of certain business cases where the supervisor asked the Company not to terminate the services of an employee on the ground that the person concerned was important for the success of the project but the requests were denied. In one such case, the head of the vertical was reported to have said, “As the employee has only C ratings, it would be difficult to make a case for that person”. This suggests, yet again, the downgrading of the ‘C’ band which had earlier signified performance that met the Company’s expectations.

None of the retrenched employees was given the opportunity either to upgrade their skill sets or to identify existing project requirements before their services were terminated. TCS did not also provide recourse to challenge the termination even when there was a business case. When an employee initiated a complaint using the internal grievance system, a junior HR representative contacted him and gave vague answers. His request for a meeting with senior HR officials to seek clarifications was denied.

According to the employees, the spate of layoffs has caused fear among the unaffected employees. They are afraid to seek promotions as they feel they might be targeted for retrenchment. It has also adversely affected the personal rapport between team leads and engineers. Engineers fear that any past conflict or potential conflict could endanger their continued employment. The docile environment which is thus created leaves employees with no options to raise any grievances that they may have.

Fear of NASSCOM blacklisting

NASSCOM has initiated and promoted vigorously a national skill registry[4], through which NASSCOM “facilitates development of Fact Sheet of Credible, Permanent and Accessible information about each registered person”.  NASSCOM outlines the rationale for collecting such details thus: “NSR also deters persons faking and inflating their CVs from competing for jobs based on hyped details. So all honest persons must register their correct details on NSR and stop the menace of faked resumes”.

While NASSCOM does not allow any company to register on behalf of its employees, it works with the companies which are its members to promote the skill registry. According to the registry site, only the employee is allowed to record and modify the details.  But any present or future employer may refute and/or conduct background verification of the employee’s detail and update the registry. Employees therefore fear that companies can use the information to blacklist them and harm future employment prospects.

Our critique of the NASSCOM registry is

  • There is no information available in the NASSCOM website on the mechanism to challenge any verification information provided by the employer. There is an implied suggestion that information provided by employers is invariably correct.
  • This is also true of background verification checks by NASSCOM approved companies. If there are any errors in the verification, it is up to the employee to take it up with the EBC. This puts the burden of proof on the employee rather than the employer. There is no information on how conflicting information can be contested and corrected in a fair manner.
  • While the NASSCOM registry is voluntary, the employers  may make this mandatory for employees thus forcing them to register.
  • While the register is maintained clearly for the employer’s benefit, it is for the employee to maintain the registry and pay for its service.

Social and Familial Costs of Involuntary Attrition

The employees whose services have been terminated fall within a specific cohort in terms of experience (7 to 12 years) and age (30 to 42 years). They immediately face the problem of finding alternative employment. Openings at their level are hard to come by compared to entry level programmers or even those at an early stage of their career. Given the sluggish labour market for this category of IT professionals, finding suitable employment post-termination is a nightmare. Most of the affected persons have received no interview calls from other IT companies even after weeks of search. They face certain handicaps in the job market.

  • Though TCS does not state poor performance as an explicit reason in the letters of termination, public statements by Company representatives have created an impression that the performance of the employees concerned were below average. The affected workers believe this is a major reason why other firms are showing little interest in them. Several employees alluded to the possibility that HRs of other companies have been mandated not to recruit TCS employees. However, the committee has not been able to corroborate this.
  • Firms do background verification and the retrenched workers fear TCS may convey negative impressions about performance, hampering their chances of getting jobs.
  • The workers also apprehend that TCS may use the NASSCOM Skill Directory to blacklist them. Such apprehensions are an unfortunate result of the methods used by TCS for terminating their services.

Locational and family constraints are another major source of worry. With spouses or children working or studying in the places where they were employed when they were laid off, movement to other cities to take up jobs poses problems of dislocation and may impose considerable financial and emotional costs.

Another important issue that emerged from the discussions with the laid-off workers was the anxiety about family finances. Given the age and experience of these workers, they were experiencing a steady monthly income for some years and had made long-term financial commitments. Several employees were single member earning households and the sudden termination of service has completely upset their family budget. Apart from the money required for monthly living expenses, they have to find resources to fulfill the commitments they have already made. Most of them have taken housing loans and are at a loss as to how they will meet the huge repayment liability every month. Housing loan installments range between Rs.25,000 and Rs. 40,000 a month. Those who live in rented houses have to find between Rs.10,000 to 15,000 a month on rental accommodation.

Another source of anxiety is the educational expenses of the children. Many of them have put their children in prestigious private institutions which charge heavy fees as they were keen to give them a good education. Some families have come under such tremendous pressure that women have cut short maternity leave and returned to work.  Many of the affected employees are first generation graduates from lower middle class families who have to take care of elderly parents providing them both financial and emotional support. The financial burdens imposed by such sudden terminations are therefore huge.

Psychological Cost of being branded as Under-performer

All the employees who lost their jobs have been agonized by the way the Company branded them as under-performers. More importantly, they were shocked by the arbitrary manner in which this was done. All of them had received a rating of ‘C’ and above, which meant that their performance had met the Company’s expectations. How can the Company terminate the services of an employee who had met its expectations? This was the most frequent question that we came across. They were not intimated earlier that their performance needed improvement and so they did not get a chance to make improvement through a performance improvement plan, which is a standard norm in the Indian software industry.  Ironically, some had received good performance awards not long back!  The termination letters received soon after being rewarded by the Company for good performance came as a rude shock. One person told the Fact-Finding Committee that he was so disillusioned that he has decided to quit working in the IT sector and look at the possibility of employment in some other sector.

Some laid-off employees said they were ready to accept jobs with lower levels of salary. Financial obligations were pushing them to accept pay cuts as they cannot afford to be unemployed. More than salary, they were now looking for job security. Fear of losing jobs came up as an important factor in all the conversations of those still in employment. Re-adjustment to lower levels of income following job loss involved lifestyle changes such as moving to a smaller flat, selling off the car and reducing monthly consumption expenditure by limiting purchases to bare necessities. Social pressures of unemployment weighed down. The ‘psychic costs’ included financial dependence on frugal family support and such help as could be had from extended family and friends as they had earlier commanded social respect as a part of a Tata company. The layoffs appear to have damaged the popular belief that TCS follows excellent HR practices and dented the image of the Tatas as an employee-friendly and socially responsible group.

Lack of Institutional Support

Those who have been abruptly rendered jobless felt the total absence of institutional support for them. Such support was needed in three areas: (a) an opportunity to discuss and remedy their so-called under-performance within the Company; (b) provision of more labour market information and options as they transit; and (c) some grievance addressal and ‘sympathy’ from the governments.

The following possibilities emerge from our discussions:

  1. As TCS has benefited significantly from the contribution of the terminated workforce, it must provide more avenues for improving the skill sets of the employees and ensure that they can be shifted across projects when their skill sets become redundant.
  2. TCS can provide more avenues to employees to voice their explanations for their so-called under-performance.
  3. A more responsive and professional grievance redressal mechanism in the Company will be of help to the employees.
  4. Upfront communication of the Company’s strategic plans regarding employees can help the workers to plan the course of their career better.
  5. TCS and the software industry must evolve career progression in technical tracks instead of creating pyramid models that focus only on management careers for technical employees.
  6. Transparency regarding onsite opportunities and timely communication of employees’ reassignments upon return will help avoid ‘sudden shocks’.
  7. The state needs to evaluate the situation quickly and come up with a policy and legal measures to aid the employees.
  8. There is an urgent need to review the policy of flexible hiring and firing in the IT industry.
  9. As the industry is passing through a phase of adjustment to global market and technological changes, state agencies such as ELCOT must move away from merely protecting the short-term interests of employers towards a broader emphasis on strengthening the IT industry by supporting both the workforce and employers.
  10. In view of the confusion and suspicions about its skill registry NASSCOM must issue an official statement to lessen the retrenched workers’ anxieties regarding ‘blacklisting’. The state must examine the violations of rights of employees in management of such registries

Conclusions and Recommendations

Evidence gathered by the Fact-Finding Committee clearly establishes that the ongoing restructuring is not a routine exercise, as TCS spokespersons are seeking to make out, but is a carefully crafted and implemented strategy to reduce its mid-tier technical employees.  The committee is appalled by the lack of sensibility and social responsibility involved in the sacking of employees, which TCS euphemistically calls involuntary attrition. The serial sackings carried out almost on a daily basis at various locations are clearly part of a policy conceived at the higher levels of the company.

The arbitrary and high-handed manner in which the policy is being implemented has created a high level of insecurity among the company’s employees, numbering more than 300,000, at 46 locations worldwide.

At the end of 2013 the company was talking of hiring an additional 50,000 employees, more than it had intended to, because of better-than-expected results and new orders and the global head of HR, MrAjoy Mukherjee, reportedly said in an interview that the Company was pretty happy with its very high staff retention levels. Things started changing after his announcement last month of a “significant performance related restructuring” of the workforce, which would affect middle to senior levels most. He reportedly said he had no target in mind and that the ongoing review process was normal and would go on for a year. Within days, middle-level employees at various locations started getting letters of termination. On January 15, the company acknowledged axing 2,574 employees, including about 1,000 in India.

Almost all those who gave evidence said they had joined TCS rejecting other offers, attracted by the Company’s high reputation and were in fact quite satisfied with the way it treated them until the current phase of involuntary attritions began.

The evidence belies the Company’s claims about the process under way and reflects adversely on the Tata Group’s reputation for fair practices. Those who have been dubbed non-performers and sent out are employees who were placed during the annual review in Class C, which, under the company’s own norms, indicates a performance level of up to 100%. In many cases, the company and the clients they worked with had also expressed appreciation of their work.

In the circumstances, we urge TCS to urgently review the decision to undertake large-scale retrenchment of middle-level employees. If, indeed, there is a case for restructuring of the staff pattern, the Company must do it in a transparent manner, taking the staff into confidence. In particular, it must remove the ambiguities in the performance appraisal process and make it fair by putting it on a scientific basis. The employees must be provided reasonable opportunities to make representations against any perceived injustice in their appraisal.

The State, which has a responsibility with regard to employment and labour welfare, must not remain a silent spectator in face of large-scale unjust retrenchment in a major industry. We appeal to all state governments concerned to intervene quickly to safeguard the interests of TCS employees, especially since there is an imminent risk of other employers also resorting to similar action(We draw attention to reports on the imminent layoffs by IBM in the media).  We demand that the state initiate a judiciary probe into the TCS layoffs and the violations of labour and human rights in the flexible firing policy adopted by IT industries.

It is obvious that the labour laws adequately do not represent the changing realities of labour arrangement in knowledge based industries. We recommend a permanent tribunal for knowledge based industries including IT, ITES, BPO call centres etc. They must also review the exemptions provided to the IT industry from certain labour laws with a view to protecting the legitimate interests of employees in this important sector.

In view of the fears and concerns of IT employees about the NASSCOM skill registry, the governments must examine the violations of privacy of IT employees and must consider the possibility of establishing a mechanism, similar to that of employment exchanges, to cater to the needs of IT employees.

[1]              http://articles.economictimes.indiatimes.com/2014-12-12/news/56990117_1_non-performers-restructuring-exercise-voluntary-attrition, Dated 12/12/2014

[2]          According to the employees, their pay has three components: a fixed component based on their designation, a variable component based on the performance of the company, a variable component based on their individual performance.

[3]          A performance improvement plan is a targeted skill improvement program implemented for the employee for a particular duration. The PIP may involve either technical skill or soft skill. The program will be usually 3 to 6 month duration where the employee is assigned to improve the particular goal measure.

[4]          www.nationalskillregistry.com

6 thoughts on “Fact-Finding Committee on Lay Offs at Tata Consultancy Services Releases Report

  1. Yella Ok

    There are far more important matters to worry about in the country than laid off TCS employees. These software engineers are educated, have earned well and should have known better that theirs is a terminable job. If the skills are lacking, if there is under-performance and even otherwise, even a best-performing employee can be sacked if the market conditions change and the services of the employee is not required.

    Software engineers should know better. Pls don’t kill enterprise and job creation in large no.s for the benefit of a few sacked – who, given that they are educated and skilled will not come to the streets and will figure a way to rebuild their careers.

    There is NO urgent need to review the policy of flexible hiring and firing in the IT industry. If there is an urgent need, it is for communists to STOP meddling in the affairs of (arguably) the only meritocratic industry in the country.

    Let us not kill a golden goose.

    P.S – While not a software engineer, I am also only an employee, not an employer, in a knowledge-based industry.

    1. bilal

      “the only meritocratic industry in the country”. Really?
      I am a former employee of TCS. I know how the bands are assigned and how “meritocratic” it is.
      Need of the hour is for the employees of such organizations to unite and protest against such arbitrary policies.

    2. சிவப்பு

      As a TCS employee I know the rating and the system which you guys are bearing.

      Not only the TCS laid-off but so many such kinds are happening across the country pushing us into the forefront of the struggling that already been engaged by the so called working class people.

  2. kiran

    dear sir ;
    in the same manner during year 2009 I was forcefully asked to resign by TCS management even after my promotion was initiated . I served the company for 4 years with my sincear efforts ; I was looking TCS as faith full company ;but within only one day I was forcefully asked to resign ;I was having small kid and family at that time; as per terms and conditions of offer letter given by TCS they have even not given me the notice period salary also ;suddenly within one day I was asked to resign ; how some body can find another job suddenly in another. company ; I was not having sufficient funds to run my house also at that. time; I feel this is very shameful act done by TCS HR requesting you to investigate the matter in deep and do the justice

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