TCS to lay off 12,000 employees; What does it means for Indian IT

Tata Consultancy Services (TCS) will reduce its global workforce by approximately 2%, impacting over 12,000 employees. This event will be marked as one of the most significant workforce reductions in the company’s history. The decision will be primarily targeting mid-level and senior executives.

As of 30 June 2025, TCS has a total workforce of 613,069 employees. The company has stated that this reduction is part of a broader strategy to become a “future-ready organisation”. And this vision includes investing in new technologies, expanding into new markets, and deploying AI at scale.

According to reports, TCS CEO K. Krithivasan addressed the decision, explaining that while the company has undertaken reskilling and redeployment initiatives for its employees, some roles are not feasible for redeployment. He emphasised that the process will be gradual throughout fiscal year 2026, with affected employees receiving appropriate benefits, outplacement services, and counselling.

This workforce reduction follows recent changes to TCS's internal policies, including a revised bench policy requiring employees to maintain a minimum of 225 billable days per year and capping bench time at 35 days. Failure to meet these requirements may lead to disciplinary action. The company also recently deferred the onboarding of approximately 500 lateral hires due to project delays and changes in scope.

The IT sector in India faces a period of recalibration. While companies like TCS are actively training employees in new skills such as cloud, data, and AI, the demand environment remains challenging. This latest development from TCS signals a strategic pivot towards a leaner, more agile workforce, focused on future technologies and client needs.

This particular move can also be viewed as an early indicator of a wider trend within the iT sector. Increased reliance on automation and AI, coupled with client demands for significant price reductions on contracts, is pushing companies to rebalance their workforces to maintain profit margins. Such layoffs affect experienced professionals, many with over a decade in the company, raising questions about the future of traditional IT roles.