Wipro, India’s third-largest IT services company, is looking to reduce its workforce by 10 percent this year, Moneycontrol has learned from some managers in the company. Wipro currently employees close to 1.8 lakh people.

Internally, the project is code-named B10 (Bottom 10 percent). The managers said the human resource department had asked them to identify the bottom 10 percent during appraisals which concluded in April. The company last year introduced a quarterly appraisal system.

When asked about this, Wipro denied the development, but refused to give the actual percentage of employees it was likely to fire due to performance-related issues.

“These rumours have no basis,” the company said in an e-mail response.

Moneycontrol spoke to several senior managers who confirmed that the targeted headcount reduction is 10 percent this year.

Last week, Wipro Chief Strategy Officer and board member Rishad Premji told CNBC-TV18 that performance-related separations this year were not much different from those in previous years.

Appraisals closed at the end of April but managers claim that the decision to weed out 10 percent was taken prior to that. Managers have been told to give a low rating of 2 out of 5 to the employees identified as the bottom 10 percent.

They said the company is focusing on people in the middle management and those in a salary band upwards of Rs 10 lakh per annum. In many cases, managers were given a list of names they had to seek resignations from. Some of the managers claim that they tried to resist, but had to back off when the HR department read the riot act.

It’s not just employees in India that are affected: Several engineers onsite have been recalled and asked to resign.

It may be recalled in 2015, former CEO TK Kurien had said at an analyst meeting in Frankfurt that Wipro was looking to reduce headcount by around 47,000 over three years as many processes would be automated. In an interview to NDTV at Davos, Kurien had cautioned that the middle management was most vulnerable, as the traditional offering of application, maintenance and development work would shrink to less than one-third of total revenues in five years’ time. Wipro had roped in McKinsey in 2015 to help automate processes across industry verticals so that costs to clients could be reduced.

Like Cognizant, Wipro, too, is not formally sacking staff or putting people on notice for non-performance. The company is asking people to resign voluntarily and accept two months’ salary, the managers said. Several employees who have been asked to resign are refusing to do so as they believe the company needs to pay a severance package if it wants them to go.

Many of those who have been identified as poor performers claim that they are only being given two months of basic pay, which is very low considering the number of years they have spent in the company.

In fact, many employees have also shared their past performance appraisals with this correspondent to show that they were rated highly till last year, and now have been put in the underperformers’ list.

When asked why the company was asking employees to resign rather than asking them to go if performance was an issue, the company’s response was: “Wipro undertakes a rigorous performance appraisal process on a regular basis to align its workforce with business objectives, strategic priorities of the organization and requirements of our clients. This systematic and comprehensive performance evaluation process triggers a series of actions such as mentoring, retraining and upskilling. Regular feedback and multiple opportunities are provided for improving performance. The performance appraisal may also lead to separation of some employees from the company and these numbers vary from year to year."

Wipro had kicked off an ambitious project to automate some of the basic processes, which are typically addressed by L0 and L1 category of employees (0 to 2 years experience). The company had roped in McKinsey in 2015 for this purpose.

A team of 50 people was identified who would lead the company’s ambitious foray into a digital services space, where automation would be a key factor. However, the company has not managed to achieve its automation target and now it needs to cut costs, said one senior manager who was part of the team overseeing this project.