TCS to lay off around 12,000 employees! Tata Consultancy Services plans 2% workforce cut over the year; what you should know

TCS layoffs: Tata Consultancy Services (TCS), India’s largest IT services firm, plans to lay off as many as 12,000 employees over this year. This amounts to nearly a 2% reduction in the workforce of the IT giant.In an official statement, TCS told ET, “TCS is on a journey to become a future-ready organisation… 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.”

TCS Layoffs: What’s Behind The Move?

India’s IT services sector, which generates combined revenues of over $283 billion, has software companies ranked amongst the biggest private employers. TCS leads as the largest employer in this segment.According to the report, ongoing economic uncertainties and disruptions caused by AI technologies are impacting business demands.The Tata group subsidiary, based in Mumbai, has a total employee count of 613,069 at the close of June 2025. According to a Reuters report, the layoffs will majorly affect people in the middle to senior management positions and around 12,200 people will be asked to leave.According to HFS Research’s CEO Phil Fersht, artificial intelligence is diminishing the labour-intensive service delivery approach in the industry.“(That model) is forcing large service providers such as TCS to rebalance their workforces to maintain profit margins and stay price-competitive in a cut-throat market where clients are demanding 20-30% price reductions,” Fersht was quoted by Reuters.He further noted that this action by TCS, known for providing stable employment, underscores this industry-wide development.The impacted employees who will be asked leave will be provided with notice period compensation and extra severance benefits. Additionally, TCS plans to provide insurance coverage extension and career transition assistance to those affected by this decision, the report said.TCS also said, “This transition is being planned with due care to ensure there is no impact on service delivery to our clients… We understand that this is a challenging time for our colleagues likely to be affected. We thank them for their service and we will be making all efforts to provide appropriate benefits, outplacement, counselling, and support as they transition to new opportunities.”This workforce reduction comes within days of many TCS staff employees initiating legal proceedings challenging the company’s modified bench policy. The revised policy stipulates that employees can only remain unbilled for 35 days annually and must achieve a minimum of 225 billable days per year.In the April-June quarter, the leading six IT companies saw 72% reduction in workforce expansion, with only 3,847 new hires, compared to 13,935 recruitments during the January-March period.TCS announced its comprehensive strategic approach, which includes investments in emerging technologies, market expansion, large-scale AI implementation for clients and internal operations, strengthening partnerships, developing advanced infrastructure and restructuring their employment framework.To achieve these objectives, various programmes focused on skill enhancement and staff reallocation have been initiated and are currently in progress.