TCS acts against 6 employees for favouring staffing companies, says Chandrasekaran

Mumbai: IT services firm TCS has acted against six employees after finding them favouring a few staffing companies, Tata Sons Chairman N Chandrasekaran said on Thursday.

The Tata Group’s cash cow feels the next few quarters will be volatile due to business uncertainties in the developed world but the company has good prospects in the medium to long term, he told shareholders.

In February and March, it received two whistleblower complaints alleging misconduct by certain employees from the resource allocation group, which is entrusted with appointing contractual employees from empanelled staffing firms, he said, adding that the issues were in India and the US.

About 2-3 per cent of the overall resources it deploys are such business associates (BAs), Chandrasekaran said, adding that there are 1,000 such staffing firms empanelled with the company across 55 countries.

“We found six employees who did not follow the ethical conduct we have banned all those six employees and also the six companies,” he said, pointing out that the action has been taken following investigation.

The company is investigating the role of three more employees, Chandrasekaran said, without giving any details about the employees or their designations.

“We can’t quantify what favours they (the employees) got but they certainly behaved in a way that they were favouring certain firms,” he added.

Earlier this month, there was a media report alleging a ‘bribes-for-jobs’ scandal at the Tata Group firm and that people involved have earned at least Rs 100 crore.

The company denied that bribes were sought to recruit people, but said that unethical behaviour was observed in the resource allocation group which deploys talent and fills up shortfall through BAs.

With a lot of shareholders asking about the demand environment for IT services, Chandrasekaran made it clear that there may be volatilities in the near term.

“When there is an uncertainty in the global economic situation on higher inflation or slowing of growth, companies (clients) will calibrate their spending (in) nearby quarters, there will be volatility in different markets on the customer spend especially on discretionary projects and it will go across sectors,” he added.

Spending can get impacted in the banking, financial services and insurance sector which is its largest by revenues, or manufacturing, or even retail as companies conserve cash amid a dip in consumer spending.