The Indian IT giant Tata Consultancy Services (TCS) has made headlines with its decision to reduce its workforce by approximately 12,000 employees, representing 2% of its global headcount. This significant move reflects the changing dynamics of the technology sector amid AI disruption and evolving market demands.
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Key Details of TCS Workforce Reduction
| Aspect | Details |
|---|---|
| Total Jobs Affected | 12,000-12,200 employees |
| Percentage of Workforce | 2% of global headcount |
| Timeline | Throughout FY26 |
| Primary Targets | Mid and senior-level positions |
| Current Workforce | 6.13 lakh employees (as of June 2025) |
| Support Offered | Severance packages, outplacement services, extended benefits |
Why is TCS Cutting Jobs?
The decision affects two percent of the company’s workforce amid mounting economic pressures and changing client demands. Several factors are driving this strategic restructuring:
AI-Driven Transformation: The rapid adoption of artificial intelligence is reshaping how IT services operate. TCS is adapting to this technological shift by restructuring its workforce to align with future skill requirements.
Market Uncertainties: Global economic challenges and changing client expectations have forced the company to optimize its operations for sustained growth.
Skills Realignment: Over 1.14 lakh employees have already been trained in advanced AI skills as the company pivots toward emerging technologies.
Impact on Different Employee Levels
The move will primarily affect staff in mid- and senior-level roles. This strategic approach suggests TCS is focusing on:
- Flattening organizational hierarchies
- Reducing operational costs in management layers
- Creating space for fresh talent with contemporary skills
The company’s recent bench policy requiring 225 billable days annually has already put pressure on underutilized employees.
TCS’s Commitment to Affected Employees
Despite the layoffs, TCS isn’t abandoning its workforce entirely. “This transition is being planned with due care to ensure there is no impact on service delivery to our clients,” the company stated.
The support package includes:
- Comprehensive severance packages
- Professional outplacement services
- Extended healthcare benefits
- Career transition assistance
Future Hiring Plans Remain Strong
Interestingly, while cutting 12,000 jobs, TCS remains committed to hiring fresh talent. The company plans to recruit 40,000 trainees in 2025, demonstrating its focus on building a future-ready workforce with contemporary skills.
This apparent contradiction highlights TCS’s strategy of replacing experienced but potentially outdated skill sets with fresh talent trained in emerging technologies like AI and cloud computing.
Industry Context and Market Performance
TCS reported one of its weakest first-quarter results earlier this month, since 2020, with constant currency growth dropping 3.1 per cent and dollar revenue growth shrinking 1.1 per cent.
The broader tech industry is experiencing similar challenges, with over 80,150 employees laid off across 169 tech companies in 2025 according to industry data.
For more insights on the evolving tech landscape, check out our comprehensive analysis of IT industry trends.
What This Means for the IT Sector
TCS’s decision signals a broader transformation in the Indian IT services industry. Companies are increasingly prioritizing:
- AI and automation capabilities
- Local workforce development in key markets
- Agile organizational structures
- Skills-based hiring over experience-based recruitment
Learn more about these industry shifts in our detailed IT sector evolution guide.
Stay updated with the latest tech industry news and analysis by following TechnoSports. For official information about TCS’s workforce policies, visit the company’s investor relations page.
FAQs
Q: When will the TCS layoffs begin?
A: The workforce reduction will be implemented throughout FY26, with the process already underway as part of the company’s strategic restructuring.
Q: Will TCS provide support to laid-off employees?
A: Yes, TCS is offering comprehensive support including severance packages, outplacement services, extended benefits, and career transition assistance to help affected employees find new opportunities.
