Tata Consultancy Services (TCS), India’s largest IT services firm, is executing the first major layoff in the Indian IT sector, slashing 2 per cent of its global workforce — roughly 12,200 jobs. Framed as a push toward building a “future-ready generation” through “skilling and redeployment,” the move is, in effect, a sweeping cost-cutting exercise. The axe will fall hardest on mid- and senior-level employees, signalling a tough new chapter in the industry.
TCS said it’s on a journey to become a future-ready organisation. “This includes strategic initiatives on multiple fronts including investing in new-tech areas, entering new markets, deploying AI at scale for our clients and ourselves, deepening our partnerships, creating next-gen infrastructure and realigning our workforce model,” TCS said.
“Towards this, a number of reskilling and redeployment initiatives have been underway. As part of this journey, we will also be releasing associates from the organization whose deployment may not be feasible,” the company said in a statement. “This will impact about 2% of our global workforce, primarily in the middle and the senior grades, over the course of the year,” TCS said.
TCS’s decision is expected to create uncertainty in the Indian IT industry, with industry experts anticipating that other major firms may follow suit. The move signals a potential shift in workforce strategies, especially as companies increasingly turn to automation and cost optimisation. As one of the sector’s largest employers, TCS’s actions could set a precedent, prompting similar measures across the industry and raising concerns among employees about job security and long-term career stability.
According to TCS, this transition is being planned with due care to ensure there is no impact on service delivery to our clients. “We understand that this is a challenging time for our colleagues likely to be affected. We thank them for their service and we will be making all efforts to provide appropriate benefits, outplacement, counselling, and support as they transition to new opportunities,” it said.
“The continued global macro-economic and geo-political uncertainties caused a demand contraction. On the positive side, all the new services grew well. We saw robust deal closures during this quarter,” K Krithivasan, managing director and CEO, said while announcing the results earlier this month. “We remain closely connected to our customers to help them navigate the challenges impacting their business, through cost optimisation, vendor consolidation and AI-led business transformation,” he said.
Aarthi Subramanian, executive director-president and COO, TCS, said, “Across industries, clients are increasingly shifting their focus from use case-based approach to ROI-led scaling of AI. We are investing across the AI ecosystem including infrastructure, data platform solutions, AI agents and business applications.”
Story continues below this ad
Earlier this month, TCS reported a 6 per cent growth in its consolidated net profit at Rs 12,760 crore for the first quarter ended June 2025 as against Rs 12,040 crore in the year-ago period. The company’s revenue rose to Rs 63,437 crore, higher by 1.3 per cent as against Rs 62,613 crore in the year-ago period. However, TCS’ revenue declined 3.1 per cent year-on-year (YoY) in constant currency. The company’s operating margin was at 24.5 per cent, an expansion of 30 bps on a quarter-on-quarter basis.
India’s corporate sector has been witnessing a host lay-offs, especially in the tech and startup segments in the last two or three years. Byju’s laid off approximately 2,500 employees in late 2023, followed by another 500 in April 2024 — primarily from its sales and marketing teams. These cuts came after earlier layoffs in 2022 that affected up to 3,500 staff. Dunzo cut about 30 per cent of its workforce — roughly 300 jobs — in early 2023, adding to previous reductions. Ola Electric laid off more than 500 employees in November 2024 and over 1,000 additional workers in March 2025, targeting roles in procurement, fulfilment, customer service, and infrastructure as part of a broader cost-cutting and profitability strategy.
