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March 30, 2024

TCS Under Fire: Allegations of Discrimination and Layoffs Surface Again in the US

Amidst allegations of discrimination and layoffs, Tata Consultancy Services (TCS) finds itself embroiled in controversy once more as over 20 employees in the United States have lodged a complaint against the company with the US Equal Employment Opportunity Commission. According to a report by the Wall Street Journal (WSJ), these employees accuse TCS of discriminatory practices based on race and age, asserting that the company replaced them with individuals holding H1-B visas.

The WSJ report reveals that a cohort of seasoned American professionals alleges that TCS terminated their employment abruptly, subsequently filling many of the vacant positions with Indian workers on H1-B visas. The complainants assert that TCS engaged in unlawful discrimination based on race and age.

Responding to these allegations, TCS issued an email statement rejecting the claims of discrimination and layoffs. The company emphasized its commitment to being an equal opportunity employer in the US, stressing its adherence to the highest standards of integrity and values in its operations.

A source familiar with the situation confirmed to Business Standard that approximately 22-30 employees, primarily ranking at the bottom of the performance spectrum, have been laid off, including a significant number of contractual workers. However, independent verification of these figures is pending.

“TCS has been closely examining its cost structure, particularly in light of decreased demand, and has prioritized onboarding individuals who have received offer letters,” revealed an industry insider acquainted with the matter. The company aims to reduce its reliance on contractual staff amid market challenges.

In the face of dwindling demand, major IT firms have been exploring avenues to trim expenses, leading to a reduction in contractual employment. These workers are typically engaged onsite to fulfill skill gaps or meet high demand, thereby circumventing the lengthy process of training existing employees.

“It is widely known that TCS annually terminates around 1% of its workforce based on performance,” added another source.

This is not the first time an Indian IT services firm has confronted allegations of discrimination. TCS previously encountered similar accusations in 2015, resulting in a favorable verdict for the company in 2018. Similarly, in 2022, TCS obtained partial relief in a discrimination case filed in a New Jersey court.

In 2018, three TCS employees lodged a complaint against the company in Oakland, California, yet a jury unanimously ruled in favor of TCS.

Sources privy to the matter disclosed that the complaint has been lodged with the employee commission rather than with any court. “This action was taken nearly eight months ago,” stated the aforementioned source.

In prior instances, firms such as Infosys and Wipro also faced legal challenges alleging discrimination by employees in the US

Jhumpa Lahiri

Jhumpa Lahiri

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