TCS has issued a clarification on this story. Please read it at the end of the article. Tata Consultancy Services (TCS), India’s largest information-technology services player, is learnt to be undergoing a restructuring exercise. The workforce optimisation programme, in the planning stage, is expected to be over in February 2015. According to company sources, every vertical has been asked to identify senior staff who have not been very productive. Employees who have been put under the scanner are above the rank of consultant — senior consultant, principal consultant, vice-presidents, etc. “These are employees with around 20 years of experience and some 25,000 employees could fall in this category. They would be reviewed during the process which will get over by February 2015, before the next appraisal cycle starts from March,” the sources added.
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As a result, the training and recruitment cost of technology services companies has risen steadily in the past few years. Recruiting a trainable pool is not sustainable option going forward,” the report noted. Companies in the sector have been pointing out that going ahead, increased automation will make them reduce the hiring target. In a recent interview to Business Standard, Wipro’s chief executive officer (CEO) T K Kurien had stated: “We believe we should be able to do the same thing that TCS has done, but with a lesser number of people. Large numbers of people are the biggest worry for us because we believe that at some time, you will hit an upper limit. So our target is to reach that kind of performance but with a highest level of automation.” With TCS aiming to generate annual revenue of $5 billion from its digital services in the next few years, N Chandrasekaran, managing director and CEO of TCS, has in the past said that the world and hence the business has moved to a different paradigm. “Technology innovation will only increase. We have talked about digital issues like cloud, big data, mobility, etc. But going ahead, a lot more technologies will be built on top of that. From our side, the world has moved into a different paradigm and it’s called the default digital paradigm,” he had told Business Standard in an earlier interview. “It is a fact that there are several IT professionals who joined the industry during the 1990s and have not upgraded their skill. They need to either re-skill themselves, up-skill or leave the organisation. This reset of employee capability is the new reality and will be now evident in every business cycle,” said another analyst. TCS clarifies: TCS has clarified that the restructuring will not affect "some 25,000 employees with around 20 years of experience", as mentioned in the report. A TCS statement says as has been mentioned by Ajay Mukherjee, EVP and head of global HR at a press conference in Bangalore on December 12, "the annual involuntary attrition is between 1-2 per cent across the organisation which includes employees who retire, business associated hired for specific projects, etc". The error is regretted.