In a move that has sent ripples through India’s IT sector, TCS layoff plans are underway to reduce its global workforce by 2%, marking the most significant headcount reduction in the company’s 50-year history. Tata Consultancy Services (TCS), India’s largest private-sector employer, announced that it will lay off approximately 12,200 employees by the end of FY26, raising questions about job security, industry evolution, and the role of artificial intelligence in the changing tech landscape.
The TCS layoff decision primarily impacts mid- and senior-level professionals, particularly those with over a decade of experience. These employees, many of whom have been central to TCS’s delivery and management models for years, now find themselves at the crossroads of a rapidly evolving technological revolution.
Why the TCS Layoff is Happening
Although TCS layoff headlines cite automation and AI disruption, the company’s official stance presents a broader perspective. According to the company, the move is part of a “future-ready” workforce strategy that involves realignment, upskilling, and embracing next-generation technologies.
“As part of this journey, we will also be releasing associates from the organization whose deployment may not be feasible,” TCS stated. The TCS layoff will affect those in non-client-facing roles, legacy technology specialists, and mid-level managers who haven’t transitioned to in-demand skill areas like cloud computing, data engineering, and AI.
Despite the forward-looking tone, the TCS layoff reflects deeper economic and operational challenges. Sluggish revenue growth, shifting client expectations, and intensified competition have forced India’s top IT firms to reevaluate their traditional, people-heavy service models.
CEO’s Stand on the TCS Layoff
TCS CEO K. Krithivasan acknowledged the weight of the decision. “This is the toughest decision of my career,” he stated. He emphasized that the TCS layoff is not solely a cost-cutting exercise or a reaction to artificial intelligence but a strategic move to build an agile, adaptive organization.
Krithivasan added that TCS had tried internal redeployment and reskilling initiatives before opting for layoffs. However, an internal source reportedly disagreed with the official explanation, citing slow growth rather than AI as the true driver of the TCS layoff.
AI: The Silent Catalyst
Although TCS has downplayed AI as the sole trigger, experts believe that the wave of automation is behind the massive TCS layoff. According to Phil Fersht, CEO of HFS Research, the rise of AI is reshaping the IT services landscape.
“The impact of AI is eating into the people-heavy services model and forcing the large service providers such as TCS to rebalance their workforces,” Fersht said. As AI reduces the need for routine, repetitive tasks, firms like TCS are automating delivery pipelines and emphasizing cost efficiency, resulting in large-scale TCS layoff actions.
Analysts anticipate that this trend will persist through at least 2026, pushing companies to train junior staff in AI tools while letting go of veterans unable to adapt quickly.
A Stricter Bench Policy Fuels the TCS Layoff
The TCS layoff wave is further intensified by the company’s updated bench policy, which came into effect on June 12, 2025. Under the new rules, employees must be billable for at least 225 days annually. Those who exceed 35 days of unallocated bench time may face termination and loss of experience certificates.
Employees on the bench must now report to the office and undergo 4–6 hours of mandatory upskilling. Over the past two weeks alone, more than 100 employees in Bengaluru have reportedly been let go under these conditions—adding fuel to the TCS layoff narrative.
Other IT Giants Follow Suit
The TCS layoff is part of a broader trend across the Indian IT landscape. HCLTech CEO C. Vijayakumar has admitted that the company has already “released” employees as a result of productivity gains enabled by automation.
Wipro, too, is reportedly trimming its workforce, though through a different lens. A new internal policy at Wipro requires senior employees to pass mandatory English communication assessments. Those who fail must enroll in Performance Improvement Plans (PIPs), often considered a precursor to layoffs.
As the TCS layoff dominates headlines, it’s clear that Indian IT as a whole is undergoing structural transformation.
A Blow to Job Security in Indian IT
TCS, once considered the epitome of job stability in India’s tech sector, is now leading a shift that challenges that very assumption. The TCS layoff reflects an uncomfortable truth: even the most secure jobs in Indian IT are no longer immune to industry upheavals.
With a 0.59% sequential revenue decline in the June 2025 quarter—the weakest among top Indian IT firms—TCS is under pressure to deliver more with less. Between July 2023 and June 2025, its compound annual growth rate (CAGR) in dollar revenue was just 0.34%, far behind competitors like Infosys (0.85%) and HCLTech (1.29%).
The TCS layoff is not just a response to internal challenges but a reflection of the entire industry’s recalibration.
TCS Layoff and the Future of Talent Strategy
The TCS layoff is prompting a radical rethink of talent strategy across IT companies. With clients demanding 20–30% reductions in contract costs, firms are shifting focus from manpower to automation and innovation.
In this new landscape, only those professionals who embrace emerging technologies and continuously upskill will remain relevant. While junior employees are being groomed to work in AI-driven environments, mid-level professionals are being asked to transform or risk obsolescence.
The TCS layoff is therefore not just a termination event but a wake-up call. Indian IT professionals are being forced to understand that adaptability, learning agility, and domain versatility are no longer optional.
Lessons from the TCS Layoff
There are several takeaways from the ongoing TCS layoff:
- No job is safe from transformation – Even top-performing employees must evolve as technology does.
- AI is accelerating change – The shift from manual delivery to software-led services is disrupting traditional job roles.
- Skills are currency – Professionals in outdated roles must proactively upskill or face redundancy.
- Workforce realignment is inevitable – Companies are now optimizing based on performance, utility, and relevance.
- Stability is conditional – The TCS layoff teaches us that employment continuity is tied to business agility.
Conclusion: TCS Layoff is a Wake-Up Call for the Industry
The TCS layoff is more than a headline—it’s a symbol of the evolving dynamics in India’s tech landscape. It signals the end of an era where job security was almost a given and the start of a future where adaptability, upskilling, and automation-readiness are the new job guarantees.
As Tata Consultancy Services embarks on this difficult restructuring journey, professionals, competitors, and policymakers must adapt to this new reality. The TCS layoff may be painful, but it is also a powerful call to action for the entire ecosystem to evolve with the times.
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