Tata Consultancy Services, India’s largest IT services exporter, announced on July 27, 2025, plans to reduce its global workforce by roughly 2%, affecting over 12,000 employees, primarily at the middle and senior management levels.
TCS cited declining demand amid macroeconomic uncertainties, shifting client behavior, and accelerated AI adoption as key drivers behind the decision. The job cuts are part of its strategy to become a more future‑ready, agile, and efficient organisation.
With a headcount of approximately 613,000 by the end of June 2025, the layoff equates to around 12,200 roles phased over fiscal year 2026 (April 2025–March 2026). The affected positions are concentrated in mid and senior grades, where deployment prospects are deemed unfeasible in the evolving business environment.
TCS affirmed the transition will be managed carefully to maintain uninterrupted service delivery to clients. Severance packages, extended insurance coverage, outplacement support, and career counselling will be provided to impacted staff. The company is also ramping up reskilling initiatives to redeploy talent where demand still exists.
According to consultancy firm HFS Research, pressure on margins and a rising demand for cost reductions—clients are reportedly seeking 20–30% price cuts—are pushing large service firms like TCS to reassess workforce models amid automation shifts. Globally, tech firms have shed over 80,000 jobs in 2025 alone, underscoring a broader industry recalibration.
TCS CEO K. Krithivasan, who has led the company’s digital transformation initiatives since 2023, acknowledged this as among the toughest decisions of his tenure. He stated that while deploying AI at scale, TCS must align its talent base with future skills and market realities.
The TCS layoffs reflect how AI-induced automation and global economic uncertainty are reshaping employment models in the IT sector. TCS, long regarded as a beacon of job stability, is signaling a shift toward leaner, tech-first operations—a move likely to be echoed by peer firms.
Despite its scale, the layoffs remain focused and strategic: about 2% of the workforce—with redeployment and reskilling forming a key component of the plan. The real test will be how swiftly TCS can upskill remaining employees while preserving client commitments. As Tata Consultancy Services navigates this restructuring, it sets a precedent for how legacy tech giants may adapt to the demands of an increasingly AI-driven economy.
