Tata Consultancy Services (TCS), India’s largest IT services company, has introduced severance packages of up to two years’ salary for long-serving employees as part of a major workforce restructuring initiative. The program, detailed in reports from October 2025, targets staff whose skills no longer align with evolving business needs, impacting approximately 2% of TCS’s global workforce—around 12,000 employees. For IT professionals, HR experts, and industry observers searching TCS severance package 2025, TCS layoffs two years pay, or TCS employee restructuring, this compassionate approach—building on TCS’s “values of care and support”—includes three months’ notice pay, tenure-based severance, outplacement services, and mental health resources via the “TCS Cares” program. While TCS emphasizes that the cuts are not margin-driven but aimed at agility in a fast-changing tech landscape, it underscores broader sector challenges like AI automation and client demand shifts, following 11,500 layoffs in 2024.
The initiative prioritizes mid-to-senior-level staff on the “bench” for over eight months, with early retirement options for those nearing eligibility.
Severance Package Structure: Tenure-Based Support
TCS’s severance framework ensures tailored benefits based on service length, combining notice pay with additional payouts and transition aid:
- Notice Period: Three months’ pay for all affected employees.
- Severance Range: Six months to two years’ salary, scaled by tenure.
- Long-Serving Employees (15+ Years): Up to two years’ pay, the maximum eligibility.
- Mid-Level (10-15 Years): Approximately 1.5 years’ salary.
- Early-Stage: Minimum six months for those with shorter tenures.
Additional support includes outplacement services (agency fees covered for three months), access to the TCS Cares mental health program, and early retirement options with full benefits plus severance for eligible staff. The Resource Management Group (RMG) is assisting with internal reassignments where possible before final exits.
| Tenure | Notice Pay | Severance | Total (Max) | Additional Perks |
|---|---|---|---|---|
| 15+ Years | 3 Months | Up to 2 Years | 27 Months | Early Retirement + Mental Health |
| 10-15 Years | 3 Months | ~1.5 Years | 21 Months | Outplacement Services |
| <10 Years | 3 Months | 6 Months | 9 Months | Job Transition Aid |
TCS spokesperson stated: “In keeping with our values, those affected have been provided care and support in each individual circumstance.”
Restructuring Context: 12,000 Roles Impacted by Skill Realignment
The cuts, primarily in administration, sales, development, and production, stem from a need to adapt to client priorities in AI, cloud, and automation. Most impacts occurred between August and September 2025, with a small number under review.
- Workforce Scale: TCS employs ~600,000 globally; 2% reduction aligns with industry trends.
- Not Margin-Driven: CEO K. Krithivasan emphasized agility over cost-cutting.
- Bench Policy: Staff unallocated for over eight months receive the simplified package.
This follows 11,500 layoffs in 2024 and reflects broader IT sector shifts, with peers like Infosys and Wipro also trimming.
Industry Implications: A Compassionate Approach in Tough Times
TCS’s generous packages contrast with harsher global cuts (e.g., Google’s 12,000 in 2024), prioritizing retention and morale. It may set a benchmark for Indian IT, where severance often caps at 15 days per year.
- Talent Retention: Encourages upskilling amid AI disruption.
- Economic Impact: Rs 2,000-3,000 crore outflow, boosting consumption.
- Peer Response: Could pressure rivals to enhance exit policies.
Conclusion: TCS’s Balanced Restructuring
TCS’s severance up to two years for 15+ year employees amid 12,000 cuts is a humane pivot in the AI era, blending support with agility. As Krithivasan navigates, it reaffirms TCS’s values. For IT workers, it’s a safety net—will it inspire industry standards? The transitions begin. mint
