TCS Plans Workforce Reduction of 12,000 Employees to Enhance Agility

TCS Announces Job Cuts Amid Technological Shifts

Tata Consultancy Services (TCS), India's leading IT services firm, is preparing to reduce its workforce by around 2% next year, which translates to over 12,000 positions. In a recent discussion with a financial news outlet, CEO K. Krithivasan explained that this decision is part of a broader strategy aimed at making TCS 'more agile and future-ready' in response to the rapidly evolving tech landscape.

Krithivasan emphasized that the entire industry is undergoing significant changes, necessitating a shift in working styles. He noted, 'Every organization must be adaptable and prepared for the future.' TCS is actively exploring new technologies, including artificial intelligence, and is reassessing the skills that will be essential moving forward.

The company has made substantial investments in career development and opportunities for its employees. However, Krithivasan acknowledged that efforts to redeploy staff have not been successful in certain areas, prompting the decision to proceed with layoffs.

As of June 2025, TCS employed approximately 613,000 individuals globally. A 2% reduction would mean around 12,200 job losses, primarily affecting middle management and senior roles, while junior employees are expected to be less impacted. The CEO clarified that these layoffs are not solely driven by AI but are aimed at aligning skills with future requirements, stating, 'This is about deployment feasibility, not merely reducing headcount.'

Experts suggest that AI is gradually reshaping job demand within the sector. As automation takes over tasks like manual testing, many senior employees are struggling to adapt to new technologies. This trend is not unique to TCS; numerous large corporations have embraced AI-driven automation, often leading to job eliminations without public acknowledgment.

Regarding the impending layoffs, Krithivasan assured that affected employees would receive severance packages, notice pay, extended health insurance, and outplacement support. He elaborated on the company's new 'bench management' policy, which allows employees to await new assignments while remaining productive. 'This initiative is not merely about efficiency; we want to ensure employees stay engaged in client projects throughout the year,' he explained.

Despite the upcoming layoffs, TCS has seen growth in its workforce during the April-June quarter, adding 6,071 new employees. Overall, the company's headcount rose by 5,090 during this period. However, the planned layoffs indicate a shift in TCS's focus towards numbers rather than effectively matching its extensive talent pool with the skills required in the fast-evolving tech environment.