28 July 2025, 02:41 PM IST
TCS will lay off around 12,000 employees—2% of its global workforce—in a major restructuring move driven by skill mismatches and strategic shifts, not AI automation, according to CEO K Krithivasan
The layoffs are also influenced by a major shift in TCS’s delivery approach. Photo: X
Tata Consultancy Services (TCS), India’s largest IT services provider, is set to lay off nearly 12,000 employees—approximately 2% of its global workforce—in one of the most significant restructuring moves in its history. The job cuts, set to unfold over the next three quarters of FY26, will primarily affect mid- to senior-level employees and some junior staff on extended bench time.
Dispelling speculation, TCS CEO and Managing Director K Krithivasan clarified in an interview with Moneycontrol said that the layoffs are not driven by artificial intelligence (AI) automation or productivity gains. “This is not because of AI giving some 20% productivity gains. We are not doing that,” he said. “This is driven by where there is a skill mismatch or where we think we have not been able to deploy someone.”
Despite extensive upskilling efforts—including training over 550,000 employees in basic AI and more than 100,000 in advanced capabilities—TCS has faced challenges redeploying staff, especially at the senior level. “Some people, especially at senior levels, find it difficult to transition to tech-heavy roles,” Krithivasan acknowledged.
The layoffs are also influenced by a major shift in TCS’s delivery approach. Moving away from the traditional “waterfall” model, the company is embracing an agile, product-focused structure. This change reduces the need for conventional project and program managers, especially those spread across multiple leadership layers. “Earlier, in waterfall models, we had multiple leadership layers. That’s changing,” Krithivasan noted.
Calling the decision “difficult but necessary,” the TCS chief stressed that the company will ensure the impacted employees are treated with compassion. The exit plan includes notice period pay, severance packages, extended health insurance, mental health counseling, and outplacement support.
Importantly, the layoffs are not concentrated in any specific geography or business domain, highlighting the broad impact of the company’s strategic shift.
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