TCS sacks four employees, blacklists three firms in Rs 100-crore recruitment scam

Tata Consultancy Services (TCS), India’s largest IT services company, has reportedly sacked four employees, sent a senior executive on leave, and blacklisted three staffing firms after uncovering a scam that involved human resource personnel in the company receiving commissions from external staffing firms for hiring employees through their services.

TCS is supposed to have taken this drastic action after a thorough investigation by an internal committee following a complaint from a whistleblower to the CEO and COO.

The complaint alleged that members of the company’s resource management group (RMG), which is responsible for recruiting more than 1,000 employees every day through employee referrals and staffing firms, had been receiving commissions from the staffing firms for years. The complaint is said to have pointed the finger at the head of RMG itself.

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One of the sources in TCS said that the scam perpetrators could have earned at least ₹100 crore over the years.

The fact that TCS has hired almost three lakh employees during the last three years will help one understand the enormity of the scam, even if the scamsters received commissions for only a percentage of the total employees recruited by the company. The scam could have involved only those employees who were recruited on a contractual basis through staffing vendors.

In what could be seen as a firefighting effort, TCS, in a statement to the stock exchanges late Friday evening (June 23) said that it had probed the allegations made in the complaint and discovered that the charges do not “involve any fraud by or against the company and no financial impact”.

The statement also said the “reference to an alleged scam in recruitment process is incorrect”.

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“The complaint referred to relates to hiring of such contract resources employed by the contractors. The issue relates to breach of company’s Code of Conduct by certain employees and vendors providing contractors,” continued the statement by TCS.

The company also clarified that none of its key managerial persons had been involved in any irregularities.

This is the first major crisis in the company since K Krithivasan took over as the CEO of TCS on June 1 this year.

(With agency inputs)