India’s largest technology services company, Tata Consultancy Services, has launched one of the most significant workforce reshaping efforts in its history, triggering debate, legal action and deep employee anxiety across the IT sector. The move follows plans to reduce staff numbers amid rapid changes in global demand, technology adoption and internal organisational priorities.
TCS on several occasions has confirmed that it is targeting a 2 percent reduction in its global workforce in the 2026 financial year, a figure that equates to about 12,000 to 12,261 job cuts across regions and business units. The company said the decision is part of a broader strategy to become more agile, adaptable and prepared for shifts in client needs, emerging technologies and new market opportunities.
Chief Executive Officer K. Krithivasan has explained that the decision was not driven solely by automation or artificial intelligence replacing roles, but by a gap between existing skills and the skills the future business requires. He pointed to challenges in redeploying some senior and mid-level staff into new roles, despite ongoing efforts to upskill and retrain large numbers of employees.
Across the Indian IT industry, this wave of job cuts reflects a broader trend affecting global services firms amid slower revenue growth and rapid digital transformation. Companies such as Accenture and other major players have also announced reductions, underscoring the sector’s struggle to balance technology adoption with workforce needs.
Scale and Market Impact
The workforce reduction already had visible effects on financial markets. After the announcements, TCS’s share price dipped and its market capitalisation declined significantly, reflecting investor concerns about future margins and growth prospects. Within a short period, the company saw its valuation fall by tens of thousands of crores of rupees.
While the official figure remains around 12,000 roles, trade unions and some employee groups have suggested that the real scale of job exits could be much higher, citing attrition, resignations under pressure and extended workforce realignment. Some union claims placed potential job losses at up to 30,000, though the company has firmly rejected these higher estimates as inaccurate and misleading.
Reasons Behind the Reductions
TCS has said the cuts are part of a strategic realignment rather than a reaction to a single factor. Alongside global economic headwinds, executives have pointed to changing client demands, prolonged delays in project ramp-ups, and the need to prioritise new technologies such as AI, cloud computing and data solutions. These factors have shifted the mix of skills the firm requires.
Despite public statements downplaying direct AI displacement, analysts observe that automation and data-driven tools have reduced demand for some traditional roles, especially manual testing, legacy support and routine project tasks. Companies in the sector are increasingly seeking specialists in AI, machine learning, cybersecurity and advanced digital services, sometimes leaving experienced but less current skill sets vulnerable.
Who Is Most Affected
The bulk of the announced cuts target mid-level and senior employees, especially those in roles that the company believes are not aligned with future priorities. Many of these professionals have long tenures, deep domain experience and seniority, making the shift particularly disruptive for individuals with families or large financial responsibilities.
At the same time, the firm has continued to hire fresh graduates and early-career professionals, reflecting a broader industry trend of reshaping teams for digital and emerging tech needs while shedding costs. This contrast underscores changes in resource strategy and talent management across India’s tech sector.
Employee Reactions and Controversies
The cuts have not been without controversy. Many affected workers have taken to social media and forums to share experiences of sudden termination, perceived pressure to resign and feelings of humiliation and uncertainty about their futures. Some ex-employees allege that they were given little time to decide their fate, while debates have erupted about fairness, dignity and procedural compliance.
Unions and worker groups have also voiced strong objections. The Nascent Information Technology Employees Senate (NITES) and other organisations have filed formal complaints alleging unlawful terminations, denial of statutory benefits and coercive employment practices. In response, the Labour Commissioner’s office in Pune has summoned TCS for conciliation meetings to examine these claims and ensure compliance with labour laws.
Some protests have taken place in cities such as Chennai, where unions have called for more transparent upskilling efforts rather than job cuts. Demonstrators have highlighted the human cost of workforce reductions and urged the company to consider alternative strategies to retain experienced employees.
Public debate has also emerged around executive compensation versus layoffs, with vocal critics questioning the fairness of job cuts at a time when top leaders receive substantial pay packages. This discussion reflects broader societal concerns about equity, corporate governance and the distribution of economic burdens.
Support and Severance
In response to the upheaval, TCS has said it will provide severance packages and support services to those whose roles are eliminated. Official statements indicate that employees will receive notice pay, graded severance based on tenure, career transition assistance and other support measures designed to ease the transition. The company has also emphasised retraining and redeployment where feasible.
Management maintains that, even with layoffs, the firm remains committed to its workforce and will continue investing in skills development, employee training and opportunities for growth in new digital domains. However, critics argue that more must be done to protect staff and ensure that the transition to a technology-driven future does not leave a generation of skilled workers behind.
Sector-Wide Implications
The restructuring at TCS is seen by many observers as symptomatic of broader shifts across the global IT industry. With automation becoming ever more capable and client priorities evolving rapidly, firms are balancing cost pressures with the need to remain competitive. These dynamics are prompting companies to rethink traditional staffing models, resource utilisation and career pathways.
As one of the world’s largest employers in the technology space, TCS’s actions carry wide implications. Industry analysts suggest that the company’s workforce changes will influence hiring practices, compensation strategies and talent development across India’s sprawling IT ecosystem.
Looking Ahead
With parts of the workforce already reduced by thousands of roles and reports showing further declines in headcount in recent quarters, the restructuring process at TCS is not yet complete. The company has stressed that layoffs will continue where necessary, but that decisions will be based on skill alignment and deployment feasibility rather than arbitrary targets.
Government authorities and industry groups continue to monitor developments, seeking a balance between corporate restructuring and employee protections. As India’s tech sector adapts to new global realities shaped by automation, market slowdowns and digital disruption, the path forward will likely involve tough decisions for companies and workers alike.
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