Synopsis
Tata Consultancy Services COO Aarthi Subramanian will head an investigation into a sexual harassment case at its Nashik unit. Eight employees alleged mental and sexual harassment by senior colleagues and inaction by HR. Police have arrested seven individuals, including an HR manager. This incident raises questions about IT companies managing operations in smaller cities.“Appropriate and stringent action will be taken against those found guilty,” Tata Sons chairman N Chandrasekaran said in a release announcing the inquiry and promising changes. “Any necessary process improvements or corrective measures will be promptly implemented and strictly enforced.”
This came after the Nashik police set up a special investigation team last week to probe complaints filed by eight employees, who said senior colleagues had mentally and sexually harassed them and that the company’s human resources department had ignored their complaints. The police have since arrested seven people, including an HR manager.
A local court extended the operation manager police custody until April 15 in connection with the case. The Nashik city police has arrested seven other executives in the matter.
Eight TCS employees have alleged sexual harassment and a forced religious conversion bid by their senior colleagues.
According to police complaints filed on August 2 and 3, 2024, the accused allegedly “engaged in a pattern of workplace misconduct between 2022 and early 2024.” One complainant accused the colleagues of making sexually coloured remarks, inappropriate comments about her appearance, and repeated attempts at unwelcome physical proximity.
The complaints include allegations of religious insensitivity, with the accused allegedly making derogatory remarks about their beliefs with the intent to hurt religious sentiments.
For decades, IT companies were based in major Indian cities. But over the past few years and especially after the Covid pandemic, they have spread to and expanded in smaller towns where costs are lower but management bandwidth can be thinner on the ground.
“In Covid, so many satellite centres were created but has governance also scaled and spread? If this issue had happened in Mumbai or Bangalore, it would have been addressed much faster,” said Pareekh Jain, CEO of Pareekh Consulting. “Here it seems they first tried to suppress it. Checks and balances also have to scale and spread.”
This episode and the 2023 bribes-for-jobs case raises the question of whether the company was becoming “too-big-to-manage,” he said.
TCS opened eight large offices in tier II cities in 2022, staffing each with about 10,000 employees. This was after the company had already expanded in cities like Nagpur, Bhubaneswar and Pune among others before the pandemic.
The Mumbai-headquartered IT giant had over 600,000 employees before it laid off 2% of its workforce over the past few months as AI-led disruption and tepid market demand forced the company to sack people.
“What happened in TCS Nashik is not a governance failure, it is a management failure,” said Aarin Capital Partners chairman TV Mohandas Pai, who once led human resources at Infosys. “This may not happen if a few good practices are followed. One, management needs to have skip-level meetings, with people one-or-two levels below them. Two, HR heads need to be shifted every two-three years and, three, POSH (Prevention of Sexual Harassment) complaints should go right to the top under the audit committee bypassing all management levels. This is a failure of process and systems.”
TCS did not respond to queries on its POSH and governance practices.
