TCS Q3FY26: Net Headcount Falls by 30k in FY26, Details Inside
Tata Consultancy Services (TCS), India’s largest IT services exporter, released its financial results for the third quarter of FY26 on January 12, 2026.
While the company maintained steady revenue growth driven by its “AI-first” strategy, the bottom line faced significant pressure due to a one-time provisioning of ₹2,128 crore for India’s new Labour Codes and ongoing restructuring costs.
Financial Results: A Tale of Two Margins
TCS reported a consolidated revenue of ₹67,087 crore, marking a 2.0% sequential increase and a 4.87% year-on-year (YoY) rise.
Despite this topline growth, net profit fell to ₹10,657 crore, down 13.92% YoY and 11.74% QoQ.
This decline was primarily attributed to the statutory impact of the newly notified Labour Codes, specifically regarding gratuity and compensated absences.
The table below highlights the performance shifts between the previous year and the immediate prior quarter:
| Metric | Q3 FY25 (YoY Comparison) | Q2 FY26 (QoQ Comparison) | Q3 FY26 (Current) |
| Revenue | ₹63,973 Cr | ₹65,799 Cr | ₹67,087 Cr |
| Net Profit | ₹12,380 Cr | ₹12,075 Cr | ₹10,657 Cr |
| Operating Margin | 24.5% | 25.2% | 25.2% |
| Dividend Per Share | ₹34.19 (Analyst Est) | ₹10.00 | ₹57.00 |
The company notably declared a bumper dividend of ₹57 per share, consisting of an interim dividend of ₹11 and a special dividend of ₹46.
TCS Headcount and Attrition: Restructuring Takes Center Stage
The workforce dynamics at TCS have seen a sharp transition as the company pivots toward an AI-led model.
The total headcount dropped to 5,82,163, a net reduction of 11,151 employees in just one quarter.
This marks a cumulative reduction of 30,906 employees since the start of FY26, following the restructuring plan announced in July 2025 aimed at streamlining middle and senior management.
| Workforce Metric | Q3 FY25 | Q2 FY26 | Q3 FY26 |
| Total Headcount | 6,07,354 | 593,314 | 5,82,163 |
| LTM IT Attrition | 13.0% | 13.3% | 13.5% |
While voluntary attrition rose slightly to 13.5%, the company emphasized that the overall reduction is part of a deliberate “skills realignment” to become an AI-first enterprise.
New Partnerships and AI Momentum
TCS’s order book (TCV) for the quarter stood at $9.3 billion, a slight dip from previous highs but still reflecting strong demand for digital transformation.
Key highlights include:
- AI Revenue: AI services now generate an annualized revenue of $1.8 billion, growing 17.3% QoQ in constant currency.
- Strategic Wins: Major contracts were secured with British retailer Morrisons and Danish operator Telenor.
- Ecosystem Expansion: TCS adopted Google Cloud’s agentic AI platform, Gemini Enterprise, and finalized the acquisition of Coastal Cloud to bolster its Salesforce capabilities.
TCS Hiring Plans: Investing in the Future
Despite the recent headcount reduction, CHRO Sudeep Kunnumal and CEO K Krithivasan indicated that hiring is not at a standstill.
The company is actively focusing on trainee onboarding and has already commenced its campus hiring cycle for FY27.
Furthermore, TCS committed to creating 5,000 new jobs in the UK over the next three years.
The strategy remains focused on “high-velocity upskilling,” with over 217,000 associates now equipped with advanced AI skills.
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