TCS Layoffs Cast Doubt on Vizag Expansion Plans, Put Spotlight on 99-Paise Land Deal

The news of layoffs at Tata Consultancy Services (TCS) has put a spotlight on the company’s deal with the Andhra Pradesh government to establish its IT campus in Visakhpatnam.

TCS, India’s largest IT services company, announced that it will cut 2% of its workforce over the course of this year. The layoffs are expected to affect as many as 12,000 employees out of its total workforce of 6,13,069 as of June 2025.

The company has attributed the layoffs to economic uncertainties and disruptions caused by artificial intelligence.

Describing the decision as one of the toughest, TCS CEO K. Krithivasan said, “The ways of working are changing. We need to be future-ready and agile. The company is deploying artificial intelligence (AI) at scale and is reassessing the skills it will need in the coming years.”

As fears that AI could replace human jobs begin to materialize, concerns have been raised over the tech company’s expansion plans in Andhra Pradesh — particularly the deal that allowed TCS to acquire land at a minimal cost of 99 paise per acre.

Chief Minister N. Chandrababu Naidu and his son Nara Lokesh, who also serves as the IT Minister, had widely publicized the development.

According to reports from April 2025, TCS was expected to hire 10,000 people for its IT campus in Vizag, which is likely to be completed in two to three years. It was also widely reported that the tech giant would begin operations in Visakhapatnam within 90 days from a temporarily rented space.

With TCS now announcing that 12,000 employees will be let go, there is animated suspense over its expansion plans in the City of Destiny.

While the TDP government had faced criticism for leasing prime land at just 99 paise per acre, the latest development has once again raised questions about the Chandrababu Naidu government’s haste in claiming success prematurely.

In addition to TCS, the TDP government had also approved providing land to Cognizant, another tech company, at the same rate in Vizag.

Echoing the words of Microsoft CEO Satya Nadella, it appears that software firms across the globe are grappling with the “messiness of transformation” — adopting AI while slashing jobs in the process, even as their businesses continue to thrive.

Amidst the AI upheaval, uncertainty looms over the future of Vizag, which has been extensively promoted as the emerging tech capital of Andhra Pradesh.