India’s largest IT services company, TCS, is facing renewed scrutiny after reports suggested it has asked managers to identify a fixed percentage of employees for its lowest performance category during the latest appraisal cycle. The development comes shortly after the company carried out one of the largest workforce reductions in its history, adding to concerns among employees.
According to reports, TCS Human Resources asked business unit leaders to closely review employee performance and prepare lists of associates who could be placed in B and D, the company’s lowest performance categories. Internal communication reportedly referred to achieving an agreed distribution target of around 5 per cent.
The move has generated unease within the organisation, particularly because it follows the recent exit of nearly 12,200 employees. Sources familiar with the process indicated that a significant number of employees affected during earlier workforce actions had also reportedly fallen into lower performance categories.
While performance rankings are widely used across the IT industry, employees and insiders reportedly view a structured quota-based approach as a notable shift from previous appraisal practices. Reports suggest that nearly 3 per cent of TCS employees, or approximately 17,500 staff members, were ultimately classified as underperformers during the latest review cycle.
At the same time, top performers are said to have benefited from salary increases averaging around 6 per cent, highlighting a sharper distinction between performance categories during compensation decisions.
The reported changes come amid wider transformation across the technology sector. Information technology companies globally are reassessing workforce structures as AI, automation and productivity demands reshape traditional business models.
TCS responded by highlighting its annual compensation revision process and broader workforce commitments. The company stated that salary revisions had been implemented for eligible employees and compensation structures were reworked to align with new labour regulations in India. It added that increments continue to reflect market benchmarks and performance outcomes.
The developments have also drawn attention to executive compensation disclosures. TCS recently reported an increase in CEO compensation even as the company’s overall workforce size declined during the financial year. Meanwhile, the company delivered mixed financial results, reporting steady revenue growth alongside modest annual profit expansion.
