TCS Cuts 2% of Workforce for Future Growth Sheds 12,000 Jobs
Tata Consultancy Services (TCS) has confirmed its plan to reduce its global workforce by approximately 2%, impacting over 12,000 employees, primarily within middle and senior management levels, during the financial year 2025-26.
Tata Consultancy Services (TCS) has confirmed its plan to reduce its global workforce by approximately 2%, impacting over 12,000 employees, primarily within middle and senior management levels, during the financial year 2025-26 (April 2025 to March 2026).
TCS CEO K Krithivasan has consistently emphasized that this move is part of the company’s “journey to become a Future-Ready organisation.” This involves adapting to rapid technological disruptions, particularly the rise of Artificial Intelligence (AI), and evolving operating models.While AI is a significant factor in the need for new skills and different ways of working, Krithivasan has clarified that the layoffs are not simply because AI is replacing jobs directly. Instead, it’s about addressing skill mismatches and situations where redeployment of existing talent has not been effective despite substantial investments in training and upskilling. TCS is deploying AI “at scale” and evaluating the skills required for the future.
The company has invested heavily in upskilling programs (associates reportedly invested 15 million hours in emerging technologies in Q1 FY26, with 114,000 people now having higher-order AI skills). However, there are still instances where employees cannot be effectively deployed into new, in-demand projects, leading to these difficult decisions.
Underlying market conditions also play a major role. The $283 billion Indian IT sector continues to face challenges from weakened demand, persistent inflation, and uncertainty in global economies (e.g., U.S. trade policies). Clients are holding back on discretionary spending and delaying project starts, which impacts overall business demand and revenue growth for IT firms.
TCS Chief Executive K Krithivasan stated this month that the company is experiencing delays in client decision-making and the initiation of new projects. although,the recent layoffs at Tata Consultancy Services (TCS) are a complex, strategic maneuver, reflecting the company’s urgent need to adapt to a dynamically shifting global business environment.
In essence, these layoffs aren’t just about cutting costs; they represent a fundamental recalibration of TCS’s talent pool and operational structure. It’s a strategic move to future-proof the organization, ensuring it has the right skills, at the right efficiency levels, to navigate the AI-driven landscape and respond effectively to evolving global economic pressures. This transformation is vital for TCS to sustain its leadership position in the fiercely competitive IT services market.
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