India’s largest IT services firm, Tata Consultancy Services (TCS), has announced plans to reduce its workforce by around 2%—impacting more than 12,000 employees—during the financial year 2025–26 (April 2025 to March 2026). The move primarily affects middle and senior management and is part of a broader effort to make the company “more agile and future-ready,” according to TCS CEO K Krithivasan.
While the layoffs coincide with the increasing adoption of artificial intelligence and evolving business models, Krithivasan clarified that the decision is not solely driven by AI. Instead, it reflects a need to align employee skill sets with emerging technologies and changing client expectations.
TCS has made significant investments in upskilling and redeploying staff across different roles. However, redeployment efforts have not been successful in some areas—particularly where automation has reduced demand for functions like manual testing—necessitating workforce reduction at the mid and senior levels.
Despite the upcoming layoffs, TCS recorded a net addition of over 6,000 employees in the first quarter (April–June) of FY25, signaling a shift in focus from expanding headcount to optimizing workforce capabilities in line with evolving industry needs.
The company assured that affected employees will receive support, including severance packages, compensation during the notice period, extended health insurance, and outplacement assistance. TCS emphasized that the transition will be handled sensitively to avoid disruptions in client services.