Tata Consultancy Services (TCS), India’s largest IT services company, is set to lay off approximately 12,000 employees—about 2% of its workforce—over the next year. The majority of those affected will be mid- and senior-level employees, as the company adapts to a rapidly evolving technology landscape driven by artificial intelligence and changing operating models.

Key Points

TCS will reduce workforce by 2%, affecting around 12,000 staff.

Mid- and senior-level employees to be primarily impacted.

CEO K Krithivasan links the move to AI deployment and agile transformation.

Redeployment of employees has not been effective in some areas.

Severance, extended insurance, and career assistance will be provided.

AI and Changing Work Models

In an interview with Moneycontrol, CEO K Krithivasan explained that the IT industry is undergoing a significant transformation. “The ways of working are changing, and for every company to succeed, there’s a requirement to be future-ready and agile,” he said. While he did not explicitly cite AI as the primary reason for the layoffs, he emphasized that technologies like AI are now being deployed at scale within TCS.

Krithivasan added that TCS has been evaluating the skills required for the future and investing heavily in employee reskilling. However, he acknowledged that “redeployment hasn’t been effective” in certain segments, which is one of the core reasons for the job cuts.

Who Will Be Affected?

The layoffs are expected to predominantly impact mid- and senior-level professionals across global operations. With a global workforce of 6,13,000 employees as of June 2025, a 2% reduction means roughly 12,200 jobs will be eliminated. Junior-level staff are expected to be largely unaffected.

Despite emphasizing that AI is not the direct cause, Krithivasan noted, “This is about feasibility in deployment, not because we need fewer people.”

Industry-Wide Impact

Analysts point out that AI and automation are increasingly influencing IT operations. Manual and repetitive roles such as testing, documentation, and routine support are being rapidly automated. Senior employees who struggle to keep pace with this technological shift are especially vulnerable. This trend is not unique to TCS—many global tech giants have been reducing headcounts due to automation over the past two years, although most have avoided directly citing AI as the reason.

Support for Affected Employees

TCS plans to support the impacted employees through severance packages, salaries for the notice period, extended health benefits, and outplacement assistance to help them transition to new roles.

Bench Management Reforms

The company is also revamping its approach to bench management, where unassigned employees are typically placed until new project allocations. Krithivasan said, “We want to ensure associates are able to seek projects and remain productive. This change is intended to put positive pressure and incentive for timely deployment.”

TCS Hiring Continues Despite Layoffs

Interestingly, despite the planned layoffs, TCS saw a workforce expansion during the April–June quarter of FY25. The company added 6,071 employees, resulting in a net addition of 5,090 jobs. This highlights a shift in TCS’s focus: hiring for future-ready skills while reducing headcount in areas that no longer align with strategic priorities.

Conclusion

TCS’s decision to lay off 12,000 employees underlines a broader industry pivot toward AI-powered operations and leaner, more agile teams. While the company insists that the move is not directly due to AI, the underlying shift toward automation and future-ready skills makes it clear that the traditional roles in IT services are being redefined. TCS’s strategy signals a new phase in the tech industry—one where adaptability, reskilling, and tech proficiency will determine job security.