Tata Consultancy Services has announced plans to cut almost 12,000 jobs, that is about 2% of their total workforce. With a current employee base of over 600,000 worldwide as of June 2025, this is a significant move for a company that has long been the pillar of India’s IT sector.According to media reports, the organisation is planning to spread these cuts across the financial year 2026 (FY26), and they’re calling it part of their plan to get ready for the future. However, for an industry that employs millions of Indians and transformed cities like Bangalore and Hyderabad into tech hubs, this decision raises uncomfortable questions about what that future actually looks like.
Everyone wants to be future-ready for drastic technology shift
TCS wants to become what they call a “future-ready” organisation through skilling and redeployment for its employees. TCS CEO and MD K Krithivasan has also claimed that the lay off is strictly due to strict mismatch and shortage of employment opportunity. Additionally, they’re also betting big money into artificial intelligence (AI), automation, and better infrastructure. The company reckons this means fewer people are needed for doing the same work, especially in middle and senior management roles.It’s not just TCS taking this road. Across the IT industry, companies are using machines and smart software to replace humans. The repetitive, monotonous stuff that took up so much time before can be done by computers now. TCS management believes this will save them money and let them focus on the more complicated work that actually adds value for their clients.
Money troubles and global uncertainty
It’s not just technological advancements that are prompting these job cuts. The global economic slowdown, coupled with rising geopolitical tensions and market uncertainty, has made businesses more cautious about their IT spending. TCS, which posted Rs 63,437 crore in revenue for Q1 FY25, a modest growth of 1.3% compared to the previous year, has been facing the effects of these macroeconomic challenges. While the company still recorded a 6% rise in net profits to Rs 12,760 crore, it also reported a 3.1% decline in revenue in constant currency, signaling a slowdown in demand for its services.Amid these pressures, TCS has tightened internal policies to enhance productivity. For instance, employees are now required to log a minimum of 225 billable days each year, and bench time (the period when employees are between projects) has been capped at just 35 days. These policies, designed to increase operational efficiency, signal a growing drive to maximize return on human capital, efforts that contribute to the company’s ongoing restructuring.
What’s being offered to the laid off employees?
TCS is providing a range of support to employees impacted by the layoffs:
- Reskilling & redeployment: Opportunities for affected employees to transition into new roles within the company through training.
- Financial benefits: Severance packages and extended insurance coverage.
- Outplacement support: Job search assistance and career counselling to help employees find new opportunities.
- Counselling services: Professional counselling to support emotional well-being during the transition.
- Gradual transition: Layoffs will be spread over the course of FY26, giving employees ample time to prepare.
TCS’s approach aims to ensure a compassionate, supportive transition for those affected.
TCS might’ve started a domino trail
Other IT companies can be expected to be watching TCS closely right now. When the biggest organisation in the market takes a step like this, it usually means others will follow. This push towards automation, and cutting costs isn’t something only TCS is doing. India’s wider tech scene has been going through this for some time already. Startups and smaller companies like Byju’s and Ola Electric have been cutting jobs as they try to become profitable and reduce their costs.
IT workers should brave themself for a whole new world
These job cuts are happening just as the whole Indian IT industry is trying to figure out what kind of workers it needs going forward. When AI becomes a bigger part of how businesses work, the skills that employees need change completely.TCS says they’re trying to help their workers learn new skills and move into different roles instead of just getting rid of them. They want to make sure they can still deliver good service to their clients while helping their employees adapt to this new world of work.This is going to affect the whole sector. As companies rely more on automation, AI to make things run smoothly, they probably won’t need as many people in traditional jobs, especially in middle management. But they might need more highly skilled professionals who know how to work with AI and other new technologies. The move is not exclusive for TCS, similar restructuring efforts can be expected across IT sector in India.
