TCS to slash 12,000 jobs worldwide amid tech transformation

Mumbai-based Tata Consultancy Services (TCS), India's largest IT services firm, has announced plans to reduce about 2 per cent of its global workforce over fiscal 2026 (April 2025 to March 2026).

With a headcount of approximately 613,000 employees as of June 2025, the workforce reduction will impact around 12,200 associates, primarily at middle and senior levels.

The publicly listed company said in a statement the decision is part of a strategic shift involving multiple initiatives, "including investments in emerging technologies, expansion into new markets, large-scale deployment of artificial intelligence (AI), and a revamp of its infrastructure and workforce model."

TCS emphasised that the reduction is not triggered by AI replacing jobs, but rather reflects roles where redeployment and reskilling have not been feasible.

“As part of this journey, we will also be releasing associates from the organisation whose deployment may not be feasible. This will impact about 2% of our global workforce, primarily in the middle and the senior grades, over the course of the year,” the statement said.

Future‑ready shift

TCS CEO K Krithivasan said the decision is part of a broader strategic transformation to align staff capabilities with future business models. The move comes amid disruptive technological shifts—especially generative AI and changing client demands—as well as macroeconomic headwinds such as delayed project cycles and subdued discretionary tech spending.

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The company emphasised that the reduction is not triggered by AI replacing jobs, but rather reflects roles where redeployment and reskilling have not been feasible.

TCS has significantly invested in employee upskilling and attempted redeployment programmes, but gaps remain in matching evolving skill requirements, experts observed.

'Compassionate exit'

TCS has pledged to offer a “compassionate” exit for those affected. Impacted staff will receive full notice‑period salary, severance packages, extended insurance coverage, and access to outplacement support and counselling services.

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The company underscored care in planning the transition to ensure client service delivery remains uninterrupted

Industry-wide issue

The move is in line with broader sector trends: Indian IT leaders such as Infosys, Wipro and HCLTech are confronting the same imperatives—rising automation, margin pressure, and restructuring workforce models to stay competitive

TCS’s recent revision to its bench policy—effective June 12, 2025—has drawn scrutiny. Under the new rules, associates must log at least 225 billable days each year, with a maximum of 35 non‑billable “bench” days.

Prolonged unallocated periods may adversely affect compensation, promotion, overseas postings or even employment continuity. Several employee groups and social media posts (notably Reddit) have expressed concern that this policy could be a precursor to broader rationalisation

Some commenters warned, “This is the first step towards employment rationalisation based on utilisation. Brace for layoffs.” Meanwhile, others opposed the policy as “inhumane” and damaging to mental health, especially for those stuck on the bench despite efforts to secure projects locally or within their trained domain

Outlook and implications

For TCS, the restructuring is positioned as a necessary step in building a more agile, skill‑aligned workforce.

The firm expects to pivot towards higher‑value services, emerging technologies and new geographes while trimming inefficiencies. For employees, clear communication, reskilling support and exit assistance will be critical in cushioning the impact, said IT industry experts.

However, the changes may signal caution for investors and industry watchers: slower demand, competitive margin pressure and rapid technological change are prompting legacy IT firms to rethink business models. As the benchmark player, TCS’s strategy could presage similar responses across smaller players.