GICS is the map behind sector ETFs, sector performance tables, and most peer comparisons. The hierarchy runs from 11 sectors down through industry groups and industries to over 150 sub-industries, and a company is assigned by its principal revenue source.
Reclassifications are real events. When a company moves sector, every sector-etf tracking either sector must trade it on the effective date, producing forced flow independent of news.
Example: a payments company is moved from Information Technology to Financials. Funds tracking the tech sector must sell the position and financial sector funds must buy it, generating two-sided volume on a single scheduled date.
Related: sector-rotation