MUMBAI: Tata Consultancy Services (TCS), India’s largest IT services firm, plans to reduce its workforce by around 2 per cent—roughly 12,000 employees – over the next year, with the brunt of the layoffs expected to hit mid- and senior-level roles. The move, confirmed by CEO K Krithivasan in an interview with Moneycontrol, comes as part of the company’s broader push to become “more agile and future-ready” in a rapidly evolving tech landscape.
While Krithivasan clarified that the decision isn’t solely driven by artificial intelligence (AI), he acknowledged that shifts in operating models and the increasing adoption of AI are altering the company’s workforce requirements.
“This is not because of AI but to address skills for the future,” he said. “This is about feasibility in deployment, not because we need fewer people.”
He added that while TCS has invested heavily in upskilling and career mobility for employees, redeployment efforts in certain areas have not yielded desired results. The TCS layoffs, he noted, are aimed at improving alignment between employee skill sets and future project demands.
TCS management said it will offer severance benefits including notice-period salary, extended health insurance, and outplacement support.
Interestingly, even as TCS prepares for the cuts, it reported a net addition of over 5,000 employees in the April–June quarter of FY25. The firm has signaled a shift away from managing employee surplus through traditional bench models, instead promoting self-driven project allocation and year-round productivity.
While TCS insists that the changes are not efficiency-led, industry analysts believe automation and AI are quietly reshaping demand across the IT sector, reducing the relevance of roles such as manual testing and creating challenges for experienced staff to transition into new-age tech roles.
The company’s restructuring highlights a broader trend in the IT industry, where the emphasis is shifting from headcount expansion to strategic skill alignment in response to digital transformation.
