India’s largest IT services firm, Tata Consultancy Services (TCS), is laying off around 12,261 employees this year — nearly 2% of its global workforce — as part of a strategic shift toward becoming a “future-ready organisation.” While surprising to many, especially since the company had just added 5,000 employees in the April–June 2025 quarter, the move underscores deeper industry-wide changes.
Why Is TCS Cutting Jobs?
TCS has attributed the layoffs to a realignment of its workforce model in response to rapid technological advancements and changing business needs. The company is focusing on scaling artificial intelligence (AI) across its operations, investing in next-generation infrastructure, entering new markets, and deepening its global partnerships.
In a statement, TCS said these shifts are part of a broader transformation, which includes “releasing associates from the organisation whose deployment may not be feasible.” The layoffs will mainly impact mid- to senior-level professionals, especially those whose skill sets no longer align with the company’s new AI-driven direction.
The AI Angle: Automation and Efficiency
At the core of this change is AI. As companies like TCS automate more processes, reduce manual workflows, and introduce generative AI tools for clients and internal systems, the demand for certain traditional roles is diminishing. Jobs that previously required manual coding, basic troubleshooting, or project coordination are increasingly being handled by intelligent systems.
This shift is not limited to TCS. Across the IT industry, firms are investing heavily in AI to boost productivity and reduce costs, often leading to workforce reductions in roles deemed redundant in this new tech landscape.
Changing Workforce Policies
TCS has also recently tightened its employee deployment policies. Under new guidelines, employees must maintain at least 225 billable days annually, with no more than 35 days on the “bench” — a buffer period where employees are not assigned to client projects. This move is aimed at increasing efficiency but also puts added pressure on employees to stay billable or risk termination.
A Broader Industry Trend
The slowdown in hiring isn’t unique to TCS. The top six Indian IT firms together added just 3,847 employees in the June quarter of 2025 — a sharp 72% drop from the March quarter. Many IT companies are freezing or significantly reducing hiring as they pivot towards leaner, more AI-focused operations.
What Happens to Affected Employees?
TCS has promised support for those impacted, including outplacement assistance, counselling, and appropriate benefits. However, the decision has left many professionals, especially those over 45, anxious about job security in an industry once perceived as stable. As one wealth advisor commented, “We thought TCS was like a government job. Now, no one’s safe past 45.”
