TCS Announces Major Workforce Reduction: 12,000 Jobs Cut in Strategic Tech Overhaul

Mumbai-based Tata Consultancy Services (TCS), India's largest IT services firm, has unveiled plans to reduce its global workforce by approximately 2% over fiscal 2026, impacting around 12,200 employees. This decision is part of a broader strategic transformation aimed at aligning staff capabilities with future business models, amidst rapid technological advancements and changing client demands.

Strategic Shift Towards Future Technologies

TCS CEO K. Krithivasan emphasized that the workforce reduction is not a result of AI replacing jobs but reflects roles where redeployment and reskilling have not been feasible. The company is investing heavily in emerging technologies, AI deployment, and expanding into new markets, necessitating a revamp of its workforce model.

Compassionate Exit for Affected Employees

Impacted staff will receive full notice-period salary, severance packages, extended insurance coverage, and access to outplacement support and counselling services. TCS has pledged a compassionate exit to ensure the transition is as smooth as possible for those affected.

Industry-Wide Trends and Implications

This move mirrors broader sector trends, with other Indian IT giants like Infosys, Wipro, and HCLTech also grappling with the need to restructure workforce models in response to rising automation and margin pressures. TCS's recent revision to its bench policy, limiting non-billable days, has sparked concerns among employees about potential layoffs and employment rationalization.

Outlook for TCS and the IT Sector

For TCS, this restructuring is a step towards building a more agile, skill-aligned workforce, pivoting towards higher-value services and emerging technologies. However, the changes signal caution for investors and industry watchers, highlighting the challenges of slower demand and competitive margin pressures in the tech industry.