More than 20 employees at Tata Consultancy Services (TCS) in the United States have lodged a complaint with the US Equal Employment Opportunity Commission. The complaint alleges that the company engaged in discriminatory practices based on race and age, favouring individuals with H1-B visas over existing employees. 

As per the WSJ report, a cohort of seasoned American professionals has accused TCS of terminating their employment abruptly and subsequently replacing numerous positions with workers from India holding H1-B visas. 

Additionally, the employees have alleged that TCS engaged in unlawful discrimination based on race and age. In response to the WSJ report and the allegations of discrimination and layoffs, TCS stated in an email, "Allegations that TCS engages in unlawful discrimination are meritless and misleading. TCS has a strong track record of being an equal opportunity employer in the U.S., imbibing the highest levels of integrity and values in our operations." 

However, Business Standard reported that approximately 22-30 employees, primarily at the lower end of the performance spectrum and including several contractual employees, have indeed been laid off. 

"TCS has indicated that it is closely scrutinising its cost structure, particularly in light of reduced demand, and prioritising the onboarding of individuals who have received offer letters," stated a source. 

With the IT sector experiencing decreased demand, many major firms have been exploring cost-cutting measures. One consequence of this trend has been a reduction in the number of contract employees. These individuals are typically hired on-site when specific skills are lacking within the company or when demand is high and training existing employees would be time-consuming. 

"Terminating approximately 1 per cent of its workforce based on performance is a well-known practice at TCS," remarked another insider. This isn't the first instance of an Indian IT services company facing accusations of discrimination. TCS encountered a similar situation in 2015, with the jury ultimately exonerating the firm in its 2018 decision. 

Similarly, in 2022, TCS obtained partial relief in a comparable case filed in a New Jersey Court. Back in 2018, three TCS employees filed a lawsuit against the company in Oakland, California, yet a nine-member jury unanimously ruled in favour of TCS. 

According to informed sources, the complaint has been lodged with the employee commission rather than any court, with the process initiated approximately eight months ago. This follows a trend where firms like Infosys and Wipro have also encountered discrimination lawsuits from employees in the US in the past.