Tata Consultancy Services (TCS), India’s largest IT services exporter, has announced plans to lay off approximately 12,000 employees, representing 2% of its global workforce, over the course of FY26.
The move is part of a broader strategy to make the organization “future-ready” amid evolving technological demands, operational shifts, and changing client expectations.
The layoffs will primarily affect mid- and senior-level employees, with the company citing challenges in redeployment and skill alignment as key drivers behind the decision.
TCS Strategic Shift: From Headcount to Skill Alignment
TCS stated that artificial intelligence (AI) productivity gains are not driving the workforce reduction.
Instead, it reflects a realignment of roles where deployment feasibility has become increasingly difficult.
CEO K Krithivasan clarified that the company is investing in emerging technologies, expanding into new markets, and deploying AI at scale—but the layoffs are about matching future skill needs, not reducing headcount for efficiency.
He stated, “This is not because of AI giving some 20% 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,” Krithivasan told Moneycontrol.
Revised Bench Policy and Internal Pressures
The announcement follows recent changes to TCS’s internal HR policies, including a revised bench management framework.
TCS now expects employees to log a minimum of 225 billable days each year and limits their bench time to 35 days.
These changes have sparked internal concerns and even legal challenges from affected staff.
Reports have also surfaced about onboarding delays affecting 600 lateral hires.
This underscores TCS’s measured and cautious approach to workforce planning amid an uncertain business landscape.
Support Measures for Impacted Employees
TCS has committed to handling the layoffs in a gradual and compassionate manner.
The company will follow a structured process to identify impacted employees and prioritize internal redeployment.
The company has promised support to employees who cannot be redeployed:
- Notice-period pay
- Additional severance benefits
- Extended insurance coverage
- Outplacement support
- Counselling services
Krithivasan said the company will approach the process with great compassion and will carefully manage the phased transition.
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