Tata Consultancy Services (TCS), India’s largest IT services company, has announced plans to lay off up to 12,000 employees this year, amounting to nearly 2% of its global workforce. The decision, the company said, is part of its strategy to become a "future-ready organisation" amid changing market dynamics.

In an official statement to The Economic Times, TCS said, “As part of this journey, we will also be releasing associates from the organisation whose deployment may not be feasible. This will impact about 2% of our global workforce, primarily in the middle and senior grades, over the course of the year.”

Why Is TCS Cutting Jobs?

The Indian IT services sector, with a collective revenue of over $283 billion, is facing economic headwinds and disruptions from rapid AI adoption. TCS, which is the largest private-sector employer in this space, is not immune to these challenges.

As of June 2025, TCS employed 613,069 people worldwide. The company noted that the layoffs would focus on employees in middle and senior roles, and emphasized that the move would not impact client service delivery.

Support for Affected Employees

TCS has assured that impacted employees will receive notice period compensation, additional severance benefits, extended insurance coverage, and career transition assistance.

“We understand that this is a challenging time for our colleagues likely to be affected. We thank them for their service and will make all efforts to provide appropriate benefits, outplacement, counselling, and support as they transition to new opportunities,” the company said.

Context and Broader Impact

The layoffs come just days after several TCS employees challenged the company’s revised bench policy in court. The policy restricts employees from staying unbilled for more than 35 days a year and mandates a minimum of 225 billable days annually.

The IT sector as a whole is showing signs of a slowdown. In the April–June quarter, the top six Indian IT companies collectively hired only 3,847 employees—a sharp 72% drop compared to 13,935 hires in the previous quarter.

TCS’s Long-Term Strategy

TCS has laid out a broad strategic roadmap that includes large-scale investments in artificial intelligence, market expansion, infrastructure upgrades, and partnership development. The company is also restructuring its employment framework and running multiple programmes for skill enhancement and staff reallocation.