India’s top IT firm, Tata Consultancy Services (TCS), communicated its decision to lay off 2 per cent of its global workforce to employees through an internal announcement titled “organisational message”. The unsettling message started with the words “dear colleagues” and outlined the company’s intent to transform into a “future-ready organisation”.
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“TCS is on a journey to become a future-ready organisation,” the announcement opens with this line, before diving into dreadful words that were sent to employees on Sunday afternoon.
It further states that TCS is expanding into new markets, particularly in artificial intelligence (AI), and is launching various “reskilling and redeployment initiatives” to align its workforce with future demands.
The announcement added, “This includes strategic initiatives on multiple fronts, including investing in new tech areas (Al and Data, Cybersecurity, Cloud, loT and Enterprise Solutions), entering new markets, deploying Al at scale for our clients and ourselves, deepening our partnerships, creating next-gen delivery and innovation infrastructure and realigning our workforce model.”
In the third paragraph of the “organisational announcement” dated July 27, TCS disclosed its decision to lay off 2% of its global workforce.
“As part of this journey, we will also be releasing associates from the organisation whose deployment may not be feasible. This will impact about 2% of our global workforce, primarily in the middle and the senior grades, over the course of the year.”
The company further stated that HR and business leaders would reach out to the impacted employees, who would receive counselling and appropriate benefits during the transition.
“We understand that this is a challenging time for our colleagues who are likely to be affected. We thank them for their service and will be making all efforts to provide them with appropriate benefits, outplacement, counselling, and support as they transition to new opportunities,” it further announced, before adding, “Our HR and business leaders will reach out to these associates.”
The company described the move as a “difficult decision” made in pursuit of “building a stronger TCS”.
The memo ended with the words, “While this is a difficult decision, it reflects our continued responsibility as an organisation to anticipate future needs and act decisively. We are on a journey to build a stronger TCS for our associates, clients, and all other stakeholders.”
It also urged the TCS employees to “come together” and “support” the company’s “growth momentum”.
TCS layoffs to take place in a phased manner
TCS CEO K Krithivasan has clarified the company’s announcement and said that the job cuts are not because of “AI giving some 20 per cent productivity gains,” Moneycontrol reported, but because of the “skill mismatch”.
“This is not because of AI giving some 20% productivity gains. We are not doing that. This is driven by where there is a skill mismatch or where we think we have not been able to deploy someone,” TCS CEO and MD K Krithivasan was quoted by Moneycontrol as saying.
He further added that the job cuts will take place in a phased manner and that the company would first talk to the impacted employees and provide them with an “opportunity”.
“It will be coming through the year. We won’t do it in a hurry…. We will do it in a very, very compassionate way,” he assured.
The “horror” letter by the IT firm comes after it introduced a “benching policy”, and many on Reddit have already rung the alarm bells. As per the new policy, the employees are required to bill at least 225 days a year. They can only spend a maximum of 35 days on the bench, meaning without clients or projects.
“They are removing all the people who have been on the bench for more than 2 months,” a Moneycontrol report quoted one of the affected employees.
It added, “First, they are allocating an HR person to each employee to meet in person. Those employees are asked to resign immediately, and they will get around 3 months’ salary in severance pay. If they don’t oblige, they will get terminated by TCS and won’t be eligible for the severance pay.”
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As expected, those on the Internet are furious. While some reacted with “sarcasm-dipped” comments, others went back to the time when securing a job at TCS was equivalent to a government job.
“Last line… let us come together… and do what? Fire people?” read one comment.
Another added, “They could have written in one line, ‘We messed up and hence have to fire’.”
“There was a time when people joined TCS thinking it was as secure as a government job,” a third commented.
A fourth joined, “Behind every word, I see their greed to feed the investors.”
“Those mid to senior employees would have paid more than 50-60lakhs cumulative in taxes. Now, they will have no security. Meanwhile, every government is busy with freebies based on caste,” yet another person joined.