Tata Consultancy Services is in the news for the wrong reasons, with a news report alleging that a bribes-for-jobs scandal had been unearthed at the country's largest software services exporter.
The allegations
According to a report in the business daily Mint, few senior executives who were entrusted with hiring critical personnel accepted bribes from staffing firms. The news report, quoting two unnamed executives, said that a whistleblower in communication to TCS' CEO as well as chief operating officer had alleged that the company's head of resource management group (RMG) had been accepting commissions from staffing firms for years.
The report further said that a team was set up to probe the allegations and upon weeks of investigation, the head of recruitment was sent on leave, four executives from RMG were sacked and three staffing firms were blacklisted.
TCS headcount
At the end of March 2023, TCS had 614,795 employees. On a net basis, the Mumbai-based company added 22,600 employees in the 2022-23 financial year. In its recent post earnings conference call, Milind Lakkad, the chief human resources officer at TCS, had also said that the company onboarded 44,000 freshers and the highest ever number of experienced professionals during the year.
Typically, information technology companies hire freshers directly from various engineering colleges. Experienced managers are picked up through staffing firms or via employee referral programmes.
TCS response
TCS says that recruitment activities in the company are not handled by RMG as alleged, therefore the reference to alleged scam in recruitment process is "incorrect." It further said that RMG is responsible for allocating available resources to various projects and if there is any shortfall, fill the requirements through contractors.
The complaint referred to in the article relates to hiring such contract resources employed by the contractors, it said, adding, a review to examine the allegations was launched.
"The issue relates to breach of company’s code of conduct by certain employees and vendors providing contractors; and no key managerial person of the company has been found to be involved," TCS said based on the review.
The company further said in the statement that this "does not involve any fraud" by or against the company and there is no financial impact.
The allegations of the recruitment scandal come just after a leadership transition. K Krithivasan took over as the company's CEO and MD from June 1. Rajesh Gopinathan, his predecessor, had announced his resignation back in March 2023.
Most large corporations have robust practices to follow the code of conduct and have safeguards in place to prevent such issues. Therefore, a thing like this happening at a company like
TCS, which is a part of the Tata Group, is a surprise. TCS shares closed 0.66 per cent lower at Rs 3,217.45 on Friday, while the broader BSE Sensex declined 0.4 per cent to 62,979.37. Investors will be hoping this issue is addressed effectively by the new CEO and doesn't have a wider impact on the company.
