Tata Consultancy Services (TCS) has introduced a tiered severance package with a minimum payout of six months’ salary, as part of a major workforce restructuring initiative impacting around 12,000 employees.
The move reflects the company’s shift toward AI, data, and cybersecurity capabilities, and its effort to phase out roles that no longer align with evolving business needs.
TCS Restructuring Targets Mid- and Senior-Level Roles
The severance policy primarily affects mid- and senior-level executives whose skill sets have become redundant or who have not upskilled in line with client and technology demands.
TCS is reducing its workforce by approximately 2 percent globally, with most changes implemented between August and September 2025.
A few cases remain under review.
All impacted employees are entitled to a standard three-month notice period pay. Beyond that, severance payouts vary by tenure:
- Minimum severance: Six months’ salary
- 10–15 years of service: Approximately 1.5 years’ salary
- Over 15 years of service: Up to two years’ salary
TCS is offering early retirement options to employees nearing retirement, providing full access to retirement benefits and insurance, along with additional severance based on tenure.
TCS Bench Employees Face Stricter Terms
Employees who have been “on the bench”—unallocated to any project—for more than eight months are subject to a stricter framework.
These individuals receive only the three-month notice period pay, without extended severance.
TCS clarified that it is not asking all bench employees to leave, but it is letting go of those who have not found a role match for prolonged periods.
Support Measures for Transition
To ease the transition, TCS is offering career outplacement services and covering agency fees for up to three months.
For junior associates, this support period may be extended. Services include resume development, job search assistance, and interview preparation.
The company has also continued its mental health support initiative, TCS Cares, which provides funded access to therapy and counselling for affected employees and their families.
Strategic Shift Toward Emerging Technologies
The workforce realignment is part of TCS’s broader strategy to stay agile and future-ready.
The company is ramping up investments in artificial intelligence, cloud computing, and cybersecurity.
The organisation is phasing out roles that cannot be redeployed. This allows the company to bring in talent aligned with new business priorities.
TCS CEO K Krithivasan described the restructuring as one of the most difficult decisions of his tenure.
He acknowledged its impact on long-serving employees and emphasised the need to adapt to rapid technological change.
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