India, July 27, 2025 — Tata Consultancy Services (TCS), India’s largest IT services provider, has announced plans to lay off 12,000 employees (2% of its global workforce) by March 2026. The move targets middle and senior management roles, signaling a strategic shift toward AI-driven agility and future-readiness. Here’s what you need to know.
The Announcement: Key Facts
- Scale: 12,261 jobs cut from a workforce of 613,069 (as of June 30, 2025).
- Timeline: Layoffs will occur gradually through FY26.
- Focus: Mid-to-senior roles (project managers, program leaders) where redeployment failed.
- Reason: TCS aims to become a “future-ready organization” by prioritizing AI, new markets, and workforce realignment—not short-term cost-cutting.
CEO K Krithivasan called this “one of the toughest decisions” of his tenure but stressed its necessity:
“This is about feasibility in deployment, not because we need less people. We’re investing in AI and new operating models, but some skills no longer align with client needs.”
Why Is TCS Restructuring?
- AI & Tech Shifts:
TCS is deploying AI at scale for clients and internal operations. While Krithivasan denies AI directly caused layoffs, automation has reduced demand for routine technical management roles. - Operating Model Changes:
Clients now favor agile, product-aligned teams over traditional hierarchies. Roles like non-technical project managers face redundancy. - Economic Headwinds:
Q1 FY26 saw single-digit revenue growth (1.3% YoY). Global inflation, geopolitical tensions, and delayed client decisions have squeezed IT spending.
“The ways of working are changing. We need to be future-ready and agile,” Krithivasan told.
Support for Impacted Employees
TCS promises compassionate offboarding:
- Severance: Notice-period pay + additional compensation.
- Health Insurance: Extended coverage.
- Career Support: Outplacement services, counseling, and redeployment aid.
- Tata Group Networks: Exploring roles in sister companies.
Broader Tech Industry Context
TCS isn’t alone:
- Microsoft cut 15,000 jobs in 2025.
- Global Tech Layoffs: 80,150 jobs lost in 2025 (Layoffs.fyi).
- Skill Polarization: Demand surges for AI specialists (salaries up to $100M/year), while routine roles decline.
The Hidden Crisis: Delayed Joining for New Hires
Reports reveal collateral damage:
- Candidates who quit previous jobs after receiving TCS offer letters are stranded.
- Joining dates were postponed indefinitely, leaving many unemployed.
- Kerala-based forum Prathidhwani has sought government intervention.
What This Means for IT Professionals
- Upskilling Is Non-Negotiable: TCS trained 550,000 in basic AI skills—adapt or risk obsolescence.
- Junior Roles Safer: Layoffs target senior tiers; fresher hiring continues.
- Sector-Wave Ripple: Analysts expect similar moves from Infosys, Wipro, and Cognizant.
“AI isn’t replacing jobs—it’s replacing roles that resist evolution,” notes a McKinsey report on AI’s GDP impact.
TCS’s restructuring reflects a painful but inevitable industry pivot. As Krithivasan asserts:
“We’ll keep hiring top talent. This is about building a stronger TCS for tomorrow.”
For employees, the message is clear: embrace AI fluency, agility, and lifelong learning to thrive in the new IT landscape.