Tata Consultancy Services (TCS) has reportedly instructed managers to identify around 5% of employees for the company’s lowest performance rating category during the latest appraisal cycle. The development has triggered fresh concerns among employees about possible workforce restructuring and future layoffs.
According to reports, an internal email from a human resources executive asked managers to “critically review” employees and ensure the agreed 5% distribution for the “Band D” category, which represents the lowest performance rating in the company’s appraisal system.
Move Comes After Workforce Reduction
The reported directive comes months after TCS carried out one of its largest workforce reduction exercises, cutting nearly 2% of its global workforce. Reports said around 12,200 employees were impacted during the restructuring process.
Many employees affected during the earlier retrenchment exercise were reportedly classified as underperformers. Industry observers said the latest appraisal process has intensified concerns regarding performance-linked exits.
Thousands May Fall Under Low Performance Category
TCS currently employs around 5.84 lakh people globally. Reports stated that business unit heads have already classified nearly 17,500 employees, or roughly 3% of the workforce, as underperformers.
Managers were reportedly expected to expand the number closer to the targeted 5% distribution during the appraisal cycle.
AI Transition And Restructuring Under Focus
Reports said TCS has been restructuring operations as the company accelerates investments in artificial intelligence, automation, and newer technology segments. Earlier announcements from the company indicated that workforce restructuring would primarily impact middle and senior management roles.
The Indian IT industry has increasingly focused on AI-led productivity improvements, automation, and cost optimization amid changing global technology spending trends.
Appraisal And Performance Concerns Rise
The reported appraisal changes have generated discussion among employees on social media and workplace forums regarding performance ratings, salary hikes, and job security.
Several online discussions around TCS appraisal bands suggested that lower performance ratings could impact compensation growth, bonuses, and future career progression within the company.
TCS had earlier also linked certain appraisal-related processes to work-from-office compliance measures, according to reports and employee discussions online.
TCS Continues Salary Hike Cycle
Amid the appraisal concerns, TCS has also rolled out salary hikes for FY26. Reports stated that the company awarded average pay hikes ranging between 5% and 8% during the financial year.
The company continues to remain India’s largest IT services employer and one of the country’s biggest private-sector employers overall.
