Coinciding with cost-cutting drive in Indian IT space amid fears of recession in the United States, the country's largest software exporter Tata Consultancy Services [Get Quote] on Tuesday said that about 500 members of its staff have 'voluntarily resigned' after an annual performance check.

"Employees with experience of two years and above across the company who were unable to meet the performance requirements of our company are asked to look for other jobs commensurate with their abilities," TCS spokesperson Pradipta Bagchi said.

However, he asserted that no employee has been sacked or fired. As a policy the only time that TCS dismisses people is for disciplinary reasons, he added.

"This is not an exceptional thing, it happens every year and it is part of our annual performance exercise. In TCS, everyone has to go through an appraisal cycle where they are rated between 1 and 5 depending on their performance. If in one appraisal cycle anyone is rated below 2, we put them on PIP (performance improvement plan).

"Under this they are given extra training. Even after this if their rating is below 2, then they are asked to look for other jobs," Bagchi said.

Even last year, nearly 500 employees had to leave the company on performance ground.

TCS has added 7,522 employees in the third quarter ended December 31, taking the number of its employees to 108,229.

The move comes close on the heels of global IT major IBM reportedly showing the door to a large number of its entry-level trainee programmers across major offices in the country on the grounds of performance.

Although IBM has confirmed the move, but they declined to specify as to how many trainees have been dismissed. However, sources suggest that the number could be in hundreds.

When asked about the sudden job cuts, the IBM spokesperson said it is a continuous process and is meant to validate the quality of employees.

"IBM is driven by a high-performance culture, a place where employees are able to contribute at the upper limits of their potential and continually build market-valued skills and capabilities in both formal training and experiential learning. In support of that expectation on the part of our workforce, we are pioneering new ways for our people to certify their skill levels," the spokesperson added.

However, IBM India management is reluctant to go into the details of the tests that have been conducted, citing it as an HR exercise.

Asked whether it is related to the company's performance, the spokesperson said it is a continues process and has got nothing to do with the company's performance.

Incidentally, TCS also plans a 1.5 per cent cut in variable salaries of its employees in the fourth quarter, as it fell short of certain financial targets.