July 27, 2025 | Mumbai: Tata Consultancy Services (TCS), India’s largest IT services provider, will reduce its global workforce by 2%—impacting over 12,000 employees—during fiscal year 2026. The move comes as the company adapts to rapid technological disruptions, especially in AI and automation.
Why the Job Cuts?
According to CEO K Krithivasan, this decision is not about cost-cutting or AI-led downsizing. It’s about reskilling and realigning the company to meet future technology needs.
“We’ve been investing in associates through upskilling and deployment support,” Krithivasan told Moneycontrol. “Still, some roles couldn’t be redeployed effectively. This step, though difficult, is necessary to build a future-ready TCS.”
As of June 2025, TCS had a workforce of 6,13,000. The 2% cut translates to roughly 12,200 jobs. Most affected will be middle and senior-level roles, across domains and geographies.
AI Transformation: A Driving Force
While AI is not the direct reason for layoffs, it’s changing the IT landscape. Traditional roles—especially in testing—are fading. Client projects are becoming smaller, faster, and more AI-reliant. TCS has begun deploying AI at scale, demanding a different skills mix.
“Clients expect higher efficiency with fewer people,” said analysts tracking the company. “Resistance to upskilling, especially among senior staff, is leading to a performance gap.”
New Bench Policy Adds Pressure
Earlier this year, TCS tightened its bench policy to reduce idle time. Employees must now maintain at least 225 billable days annually and can stay on the bench for no more than 35 days.
Internal reports suggest HR is meeting bench employees face-to-face. They’re being asked to resign voluntarily, receiving a 3-month severance package. Refusal may lead to termination without severance.
“I had over four years with TCS. I was benched and told to resign. It felt unfair,” said an affected employee anonymously.
Compassionate Offboarding & Support
TCS is offering more than just notice-period compensation. Severance packages include extended insurance coverage and outplacement support. Krithivasan emphasized, “We’re making this process as humane as possible.”
This layoff marks one of the most significant restructuring moves by an Indian IT firm in recent years. And it may set a trend for others facing similar pressures.
Delayed Hiring & Market Uncertainty
In addition to the layoffs, TCS has delayed onboarding of at least 500 lateral hires who were supposed to join in June-July 2025. This, coupled with project scope reductions and client delays, signals a turbulent FY26 ahead.
“The market isn’t declining. It’s evolving. The delay is in decision-making, not in demand,” Krithivasan clarified in an earlier interview.
Changing Culture: More Pressure, Less Time
The new billability rules announced by the Resource Management Group (RMG) in June have made things stricter. Employees must now approach RMG proactively for project allocation. Failure to meet the billability quota could trigger disciplinary actions, including job loss.
Average bench time is shrinking—from 45–60 days in FY20–21 to 35–45 days now, per UnearthInsight. The focus is clear: increase utilization, cut slack, and realign skills.
What It Means for the Indian IT Sector
TCS’s move is likely to trigger ripple effects across the industry. Many Indian IT firms still depend on legacy roles. As AI becomes integral, the demand for upskilled professionals will rise, while redundant roles face elimination.
It’s a wake-up call for IT professionals: reskill or risk redundancy.
