TCS plans to let go of ~12,000 employees (~2% of its workforce) in FY26. CEO K. Krithivasan says this isn’t due to AI automation—but skill mismatches and internal deployment issues. Know the full story and implications.
📉 What’s Happening at TCS?
- TCS has announced layoffs impacting approximately 12,000–12,261 employees, which is about 2% of its 613,000-strong global workforce as of June 30, 2025.(turn0search4, turn0news31)
- The layoffs will primarily affect middle and senior-level professionals across geographies and business units.(turn0search2, turn0news32)
- TCS shares dipped ~1.7%, touching ₹3,081 intraday on BSE following the announcement.(turn0news30)
🧠 Why Layoffs? What the Company Says
- CEO K. Krithivasan emphasized the cuts stem from deployment feasibility and skill mismatch, not AI-driven automation. He clarified, “This is not because of AI giving some 20% productivity gains… It’s driven by where … we have not been able to deploy someone.”(turn0search12, turn0search8)
- TCS highlighted that although it has trained around 550,000 employees in foundational AI skills and 100,000 in advanced skills, redeployment didn’t succeed universally.(turn0search8, turn0search19)
- The move aligns with TCS’s goal to become a future-ready, agile organisation amid shifting tech trends, client demand, and economic headwinds.(turn0news31, turn0search19)
🏗 What Prompted the Restructuring?
TCS cited multiple influencing factors:
- Changing Delivery Models: Clients increasingly demand product-aligned, agile, and lean engagement vs older project-heavy models requiring managers. Non-technical project roles are now less relevant.(turn0search8)
- Stricter Deployment (Bench) Policy: Since June 2025, employees must maintain 225 billable days/year, with a maximum bench period of 35 calendar days. Failure to comply may lead to termination.(turn0news27, turn0search19)
- Macro & Demand Weakness: Global uncertainties and a slowdown in discretionary IT spending depressed client project uptake in Q1 FY26.(turn0news31, turn0news14)
👥 Employee & Union Reaction
- IT employee unions, such as NITES, have raised objections, calling the retrenchment illegal and urging affected staff not to resign under pressure.(turn0news24)
- Some employees, especially on Reddit, described the move as expected but unsettling, reinforcing concerns around bench policy enforcement.(turn0search6)
✅ Key Facts Summary
| Aspect | Details |
|---|---|
| Impact | ~12,000 job cuts (2% of workforce) |
| Targeted Groups | Middle & senior-level employees |
| Primary Cause | Skill mismatch, deployment gaps |
| AI’s Role | Not a direct driver, per CEO |
| Employee Benefits | Severance, notice pay, outplacement support, counselling |
| Policy Trigger | Bench and billability norms |
🙋 FAQs
Q1: How many jobs are being cut at TCS?
About 12,000–12,261 employees (~2% of global headcount) will be phased off during FY26.(turn0search4, turn0news32)
Q2: Is AI automation the reason?
No. The company clarified the move is driven by skill mismatch and inability to redeploy employees—not because AI replaced them.(turn0search12, turn0search8)
Q3: Who will be affected?
Mainly middle and senior management levels where internal transitions couldn’t be executed effectively.(turn0search2)
Q4: Will affected staff receive support?
Yes—TCS offers severance packages, end-of-notice pay, extended insurance, outplacement counselling, and support.(turn0search12, turn0news26)
Q5: What triggered these layoffs now?
A combination of updated bench policy, reduced demand, AI-driven transformation, and the need to keep the workforce future-ready and agile.(turn0search19, turn0news27
🔍 Final Take
TCS has initiated its largest-ever layoffs—cutting 2% of its workforce—as part of structural realignment to align with AI-era expectations and client-mode delivery. While it underscores a shift in deployment models and internal policy enforcement, company leadership is clear the move is strategic, not cost-cutting driven by margins or automation. The real challenge ahead lies in managing this transition with empathy, retaining client assurance, and reaffirming the company’s commitment to future skills. The broader IT industry may follow suit, making upskilling and adaptability non-negotiable in the new tech era.
⚠️ Disclaimer
This article is for informational purposes only and does not constitute career or financial advice. Employee experiences vary—refer to official statements and verified sources.
