TCS to Lay Off Over 12,000 Employees in Major Workforce Reduction Amid Industry Shifts
Tata Consultancy Services (TCS), India’s largest and most prominent information technology services provider, has announced plans to reduce its global workforce by more than 12,000 employees, representing roughly 2 percent of its total staff. The layoffs are expected to occur throughout the 2026 financial year and mark one of the most significant job cuts in the company’s history.
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Thinkbrief
7/23/20252 min read
In a statement, CEO K Krithivasan explained that the layoffs reflect a shift in demand for specialized skill sets and the company's commitment to reskill and redeploy employees wherever possible. He emphasized that the workforce reduction is not solely a result of AI-driven automation, underscoring the company’s focus on long-term transformation. However, industry analysts point out that the growing integration of AI technologies has accelerated changes in workforce composition, making it harder for some experienced employees to transition without adequate retraining.
TCS confirmed that severance packages, including extended health insurance and outplacement services, will be extended to impacted associates to help facilitate smooth career transitions. The company also reassured clients that service delivery will remain uninterrupted despite the personnel changes, as it continues to invest strategically in emerging technologies, global market expansion, and workforce realignment initiatives.
The move comes amid broader challenges facing the Indian IT sector, which is grappling with slower demand growth, delayed client decisions, and reduced spending from key markets such as North America and Europe. Recent quarterly earnings from TCS reflect these headwinds, showing slower revenue and profit growth compared to previous years.
Experts view TCS’s decision as emblematic of the wider digital transformation underway across the industry, where traditional IT service models are evolving rapidly to incorporate cloud computing, AI, machine learning, and automation. Leading companies are being compelled to rebalance their talent pools and operating costs to stay competitive and meet the changing needs of clients.
This sizeable workforce restructuring primarily targets mid-level and senior employees across TCS’s international operations. The company attributes the move to the rapid evolution of technology, including the accelerating adoption of artificial intelligence and automation, and ongoing market uncertainties affecting client spending patterns. TCS’s leadership maintains that the decision is part of a broader strategy to realign skills, improve agility, and prepare the business for future growth in an increasingly competitive environment.
While layoffs of this magnitude inevitably impact morale, many industry insiders suggest that TCS's comprehensive approach to supporting affected employees and investing in retraining may mitigate long-term damage. The coming months will be critical as the company navigates the delicate balance between operational efficiency and maintaining its reputation as a leading employer.
As TCS embarks on this significant transition, the Indian IT sector at large watches closely for signs of how the integration of new technologies will reshape employment patterns and the future workforce landscape.