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TCS layoffs have sent shockwaves in India’s IT sector – the decision by India’s largest IT services firm to cut 2% of its workforce has laid bare the increased environment of uncertainty that the IT sector is currently facing. Tata Consultancy Services or TCS announced on Sunday its intent to sack over 12,000 employees – a number never seen before in India’s IT sector.This unprecedented workforce downsizing in the IT sector highlights the challenging market conditions, particularly without substantial contracts such as BSNL. Analysts interpret this development as a harbinger of industry-wide changes, where increased automation implementation and profit margin constraints compel organisations to lower their personnel expenses.What has TCS said about the layoffs, who will be impacted and what does the IT giant say it is doing for employees who will be asked to leave? Is this just a start of a broader trend hitting the information technology sector? We take a look at top 10 developments on the TCS layoffs front:1. TCS Layoffs: Who Will be Impacted?According to the statement released by TCS, the layoffs will impact people in the middle to senior level positions.“TCS is on a journey to become a Future-Ready organisation. This includes strategic initiatives on multiple fronts, including investing in new-tech areas, entering new markets, deploying AI at scale for our clients and ourselves, deepening our partnerships, creating next-gen infrastructure, and realigning our workforce model,” the company said.“Towards this, a number of reskilling and redeployment initiatives have been underway. 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 per cent of our global workforce, primarily in the middle and the senior grades, over the course of the year,” it added.2. ‘Difficult Decision’, says TCS CEOTCS CEO K Krithivasan has called the move to lay off over 12,000 employees a ‘difficult’ one. In an interview with Moneycontrol, K Krithivasan said, “It’s a difficult call we have to take to build a stronger TCS.” He also said that the IT company aims to make the process as compassionate as possible.
Early sign of industry shift
3. What Will TCS Do For Employees Being Sacked?TCS has said that the employees who will be asked to leave will receive comprehensive support, including outplacement services, counselling assistance, and appropriate benefits. The company will provide severance packages and notice period compensation to the staff members who are impacted.The organisation will also extend insurance coverage and offer career transition support to the affected workforce.The company’s statement reads: “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.”4. Employee Unions Slam TCS LayoffsEmployee unions in the IT sector have termed the sackings as illegal and urged TCS workers facing job cuts to stand firm against resignation pressures. The Karnataka State IT/ITeS Employees Union has called upon the industry giant to revoke the workforce reduction plans and reinstate affected personnel.The Forum for IT Employees (FITE) suggested that TCS should refrain from exerting direct pressure on staff members to resign, and instead offer notice period compensation, separation packages and health insurance coverage for one year.Also Read | ‘Don’t resign under pressure….’: TCS layoffs opposed by IT employee unions; IT giant to sack 12,000 employeesFITE emphasised that TCS maintains strong financial health and these redundancies during steady business conditions are solely driven by profit considerations. The organisation counselled TCS employees to keep detailed documentation, resist voluntary exits and reach out to either the State Labour Commissioner or FITE if faced with departure pressure, an ET report said.5. Job cuts not because of AI?K Krithivasan told Moneycontrol that the layoffs are not linked to efficiency improvements from artificial intelligence implementation. He said that the decision to reduce the workforce stems from skill mismatches. “This is not because of AI giving some 20 percent productivity gains. We are not doing that. This is driven by where there is a skill mismatch, or, where we think that we have not been able to deploy someone,” he was quoted as saying.6. No Disruption in TCS ProjectsTCS has said the process of transition and layoffs over the year is being planned in a way so as to ensure no disruption in client deliverables. “This transition is being planned with due care to ensure there is no impact on service delivery to our clients,” TCS said.7. Largest Layoffs For TCSThis will be the largest layoff for TCS in its history. In 2015, the IT firm had laid off around 3,000 people, which at that time was around 1% of its workforce.An ET report says that this the biggest ever mass layoff for the Indian IT sector till date.Also Read | TCS layoffs: What will Tata Consultancy Services do for 12,000 employees it will let go this year? What the IT giant said8. No Additional Details by TCSAccording to an ET report, TCS has not provided any additional details regarding the calculation of the 2% reduction, the implementation process for the staff reductions, or whether additional rounds of job cuts would follow in subsequent periods.9. Tough IT Sector EnvironmentThe Indian IT sector is facing unprecedented job cuts, mirroring practices commonly seen in US companies, causing widespread concern throughout the industry. The combination of global economic uncertainties and disruptions caused by artificial intelligence technology continues to affect business demand.10. Global Trends of LayoffsBased on the data from Layoffs.fyi, a platform monitoring global tech industry redundancies, more than 80,000 technology sector employees have lost their jobs across 169 companies in 2025.2024, witnessed approximately 150,000 job losses spanning 551 technology firms. These figures reflect both worldwide economic challenges and ongoing discussions within the technology sector regarding artificial intelligence’s influence on employment opportunities and workforce requirements.Microsoft, currently ranked as the world’s second most valuable listed company after Nvidia, has dismissed over 15,000 staff members in 2025, which is 7% of its worldwide staff count.Also Read | TCS layoffs: 12,000 employees to lose their jobs; Tata Consultancy Services plans 2% workforce cut over the year – what you should know
Source: Times of India
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