TCS to offer 2 years’ severance package to laid-off employees: Report

Months after Tata Consultancy Services (TCS) announced its plans to lay off at least 2 per cent (about 12,000 employees) of its global workforce in July, the firm is planning to offer severance packages of up to two years' salary to some of its employees.

Reports say, a two-year severance package will be provided to senior-level employees who were affected by the TCS job cuts, as their skills no longer align with the company’s requirements.

The Federal could not independently verify the news. However, in a statement to NDTV Profit, TCS said that "care and support" had been provided to the affected employees.

"In keeping with the values of our company, those affected by our recent initiative to realign skills have been provided care and support that is due to them in each of the individual circumstances," NDTV Profit reported, quoting a statement from the IT firm on October 2.

Also Read: Soham Parekh reacts to TCS layoffs, urges workers to upskill

AI push and realignment strategy

The decision to lay off the employees was a part of TCS's broader strategy, which focused on investments in technologies, an AI push, market expansion, and workforce realignment.

As per reports, TCS will offer a three-month notice period to the employees affected by the layoffs. After their notice period, they will reportedly receive a severance package ranging from six months to two years’ salary. The package will be decided based on their years of experience.

Additionally, a similar package has been announced for the employees who have not had a project or been on the bench for the last eight months. They, too, will receive three-month notice period pay.

According to a Moneycontrol report, employees with 10-15 years of experience could expect a severance package equivalent to 1.5 years’ salary.

Also Read: TCS layoffs: 'Sholay days' of IT sector are over, says CP Gurnani

Early retirement benefits

The IT firm is also likely to provide support for career transition through outplacement services, counselling, and coverage of agency fees for three months or more in case of junior-level employees.

The report also mentioned that employees would get early retirement options with retirement benefits, including insurance. They would also receive an additional severance package up to two years’ salary.

Also Read: Starbucks to close stores, lay off 900 workers as part of turnaround plan

TCS layoffs

In July this year, TCS announced the layoff of 2 per cent— 12,261 employees—of its global workforce. The affected employees were from middle to senior levels.

On Wednesday, Nascent Information Technology Employees Senate (NITES), a forum representing IT sector employees, alleged that TCS forced around 2,500 employees to resign from their jobs in Pune. NITES also urged Maharashtra Chief Minister Devendra Fadnavis to intervene in the matter.

However, on the same day, TCS denied the allegations and said the company's workforce realignment initiatives affected a limited number of employees.