Tata Consultancy Services (TCS), India’s largest IT services firm, confirmed on July 27, 2025, that it plans to reduce its global workforce by approximately 2%—impacting around 12,000 to 12,200 employees—across various regions and roles during FY 2026 (April 2025–March 2026)
🔍 Strategic Drivers & Context
- Skill Realignment Over AI Replacement
CEO K. Krithivasan emphasized that the layoff is not solely due to AI replacing jobs but due to mismatched abilities and deployment challenges in certain roles. The move aims to make TCS more “future‑ready and agile” - Targeted Cuts at Mid/Senior Levels
The reductions will focus on middle and senior-level roles where effectiveness and redeployment options were limited, rather than frontline junior staff
⚙️ Policy & Workforce Impact
- Bench Policy Tightening
In June 2025, TCS revised its bench policy: employees must now record at least 225 billable days annually, with a maximum of 35 bench days. Exceeding this could affect salary, promotions, or even job security - Support Programs for Affected Staff
Impacted employees will receive severance packages, extended insurance, notice-period salary, and outplacement assistance. The company has also initiated retraining and redeployment efforts to manage the transition
📊 Quick Overview
| Category | Details |
|---|---|
| Workforce Reduction | ~2% of global workforce (~12,200 employees) |
| Timeline | Fiscal Year 2026 (April 2025 – March 2026) |
| Primary Impact | Mid and senior-level employees across geographies |
| Reason | Skill gaps, benching inefficiencies, agility in tech shift |
| Support Measures | Severance, insurance, salary, outplacement |
| Operational Shift | Emphasis on AI deployment, upskilling, and project alignment |
🔎 Why It Matters
- Industry Bellwether
As India’s largest IT services exporter, TCS’s actions often signal broader sector trends. Analysts expect similar moves from peers like Infosys and Wipro - Macro & Tech Pressures
The cuts come at a time when Indian IT spending faces headwinds including slowed client decision-making, inflation, and uncertainty from U.S. trade policy - Adaptation Amid AI Disruption
Traditional roles are shrinking, and TCS is doubling down on AI deployment and service transformation, making realignment necessary to match demand
🧭 Outlook & Implications
The restructuring illustrates TCS’s prioritization of efficiency and future-readiness over retention of roles misaligned with evolving business needs. While potentially painful, the plan includes significant support for affected employees.
Investors and analysts will watch closely how the company manages future growth, client retention, and talent restructuring through the year—and whether it translates into improved performance in Q2 and beyond.
