TCS layoffs: Over 20 employees in US cry foul, file complaint against firm

Over 20 employees of Tata Consultancy Services (TCS) in the US have filed a complaint against the firm with the US Equal Employment Opportunity Commission alleging that the firm has discriminated against them based on race and age and gave their jobs to people with H1-B visas, reported the Wall Street Journal (WSJ).

The WSJ report said that a group of experienced American professionals have accused TCS of firing them on short notice and filling many of the roles with workers from India on H1-B visas. The report further goes on to say that the employees have said that TCS illegally discriminated against them based on race and age.

In an email response to the WSJ report and on the discrimination and layoffs, TCS in a statement said: “Allegations that TCS engages in unlawful discrimination are meritless and misleading. TCS has a strong track record of being an equal opportunity employer in the U.S., imbibing the highest levels of integrity and values in our operations.”

A source in the know confirmed to Business Standard that around 22-30 employees have been laid off, who were part of the bottom of the performance list and many of these were contractual employees. This could not be independently verified at the time of writing the report.

“TCS has stated that it is looking at its cost structure closely and with demand impacted they have been focused on onboarding those who have been given offer letters. It is reducing its dependence on contract employees,” said an industry source who is aware of the case.

With the industry facing low demand, several of the large IT firms have been looking at ways to cut costs. One of the impacts of this has been a cut in contractual employees, who are hired onsite when certain skills are not available within the company or the demand is high and training the existing employee base takes a long time.

“It is a known fact that TCS fires about 1 per cent of its employee base based on performance,” said another source.

This is not the first time that an Indian IT services firm has been accused of discrimination. TCS has faced a similar case in 2015, in which the jury gave a clean chit to the firm in its decision in 2018. In 2022, TCS received partial relief in a similar case filed in a New Jersey Court.

In 2018, three TCS employees filed a case against the firm in Oakland, California. A nine-member jury unanimously passed a verdict in favour of TCS.

Sources in the know said that the complaint has been filed with the employee commission and not yet with any of the courts, “This was done almost eight months back,” said the source quoted above.

In the past, firms like Infosys and Wipro too have faced lawsuits on discrimination by employees in the US.