TCS is reducing about 2% of its total workforce, which equals roughly 12,000 employees. The company has clarified that this decision is part of a strategic realignment, targeting employees who are not currently billable or deployable due to skill mismatches.
2. Not Driven by AI or Automation Alone
Unlike many assumptions, this decision is not directly driven by artificial intelligence or automation replacing human jobs. According to TCS CEO K. Krithivasan, the layoffs are primarily due to a gap between the company’s business needs and available employee skills, particularly in rapidly changing areas like cloud, cybersecurity, and data analytics. Why TCS Is Laying
3. Who Is Affected?
The majority of the impacted employees are from the mid to senior levels. Some junior employees who have remained “on bench” — meaning they have not been assigned to client projects — for an extended period are also affected. TCS is conducting the layoffs gradually, spread out over Q2 to Q4 of FY 2026. Why TCS Is Laying
4. Economic and Business Pressures
TCS is also responding to macroeconomic pressures, including reduced IT spending by clients, project delays, and pricing pressures. These challenges are forcing the company to operate more efficiently, streamline teams, and ensure that every employee contributes to active business goals. Why TCS Is Laying
What Support Is TCS Offering?
TCS has announced that it will provide:
- Compensation during the notice period
- Severance packages based on company policy
- Extension of health insurance for a limited time
- Career-transition and outplacement assistance
This signals that TCS is handling the situation in a structured and respectful manner, although it has still drawn criticism from employee unions. Why TCS Is Laying
Employee Unions Raise Concerns
Several employee unions, such as the Forum for IT Employees (FITE) and Karnataka State IT Employees Union, have raised concerns. They claim the layoffs may be a violation of employment laws if employees are being forced to resign without due process. These organizations have encouraged affected workers not to resign voluntarily and to seek legal help if necessary.
Industry Impact and What It Means
This is the largest-ever layoff in TCS history, signaling a shift in how Indian IT companies manage workforce planning. Experts believe this could set a precedent for other IT giants that are also navigating similar issues, including rising operational costs, slow growth, and the need for talent that aligns with modern technologies. Why TCS Is Laying
The move is expected to have several implications:
- Increased competition for reskilling programs
- Greater focus on certification and training in areas like AI, machine learning, cybersecurity, and cloud services
- Shift in hiring patterns — companies may favor fresher talent or project-based hires instead of permanent staff