India’s largest IT services provider Tata Consultancy Services has asked nearly 500 employees to resign due to low performance. TCS has nearly 10,000 employees working in various sections. TCS officials said that the move is based on the results of the bi-annual appraisal system adopted by the company.
The employees having poor performance are suggested to go for counseling or for a training course to improve their efficiency.
TCS spokesperson Pradipta Bagchi said, “Those who cannot meet the performance requirements of our company were asked to look for another job.”
Recently, another technology major, IBM asked 700 employees to resign due to low performance.
TCS recently announced that the incentive and bonus to the employees will be less for the next year as the margins continue to remain under pressure. The effect of US economy slow-down will prompt many IT companies to take some harsh steps.
While TCS officials claim that the move is motivated by the HR exercise to keep staff with better performance, industry experts see other reasons behind the lay-off. Many ITES / BPO companies are facing issues like lower margins, slow down in the US economy and the effect of the rising value of Indian currency compared to the US dollar.
Technology Sector has been under-performing in stock markets in the recent rally. The stocks are trading at P/E ratio almost at half of their historical P/E. Some stocks in the sector are looking good for long term investment.