TCS Layoffs 2025: Over 12000 Jobs Cut Amid Skills Gap and Industry Shift
BENGALURU / MUMBAI, July 27-28, 2025 – Tata Consultancy Services (TCS), India’s largest IT services firm with a global team of over 6,13,000 employees as of June 2025, has announced that it will lay off roughly 2 percent of its workforce, which is about 12,000 to 12,261 jobs, during its fiscal year 2026.
What is behind this decision?
1. Demand slowdown and global uncertainty
TCS says that uncertainty in global markets—such as cautious client spending, high inflation, and unsettled trade policies—has caused delays in starting new projects. This reduction in demand has reduced the need for staff.
2. Transition to a future-ready model
As part of a long-term strategy to modernize operations, TCS is expanding into areas like artificial intelligence (AI), data science, cloud computing, automation, and entering new global markets. This has prompted changes to how work is organized and delivered.
3. Skills mismatch, not AI-led layoffs
TCS CEO K. Krithivasan has said the cuts are not due to AI replacing humans. Instead, the layoffs are focused on employees whose skills no longer match client needs or company direction, particularly at mid and senior levels. Despite training over half a million staff in AI and other technologies, many could not be redeployed effectively.
4. Structural transformation in delivery models
TCS is moving from traditional multi-layered “waterfall” project structures toward leaner, agile, product-based delivery. This shift reduces the need for roles like programme managers or multiple management layers and makes some existing roles redundant.
5. New bench policy increases pressure
The company’s updated bench policy allows only 35 non-project days per year. Employees must bill at least 225 days per year, and failure to secure assignments in time may lead to termination. During bench time, employees are required to attend training and office presence, which adds to stress.
Who is impacted?
- Roughly 2 percent of TCS’s global workforce, which is over 12,000 employees, will be affected.
- The layoffs will mainly hit mid-level and senior staff, though some juniors with extended bench time may also face separation.
What support is being offered?
TCS says it will manage the transition carefully and responsibly:
- Full notice period pay and severance package
- Extended health insurance coverage
- Outplacement services like counselling and job-search support
- Internal and external reskilling programs to help employees transition to new roles
Response from employee groups and the government
- IT employee unions like Karnataka State IT/ITES and FITE have called the layoffs unlawful, urging workers not to resign under pressure and seeking reinstatement of affected staff. They demand that TCS honor proper separation benefits instead of forcing resignations.
- The Nascent Information Technology Employees Senate (NITES) has written to India’s labour minister, requesting action to halt terminations, citing concerns over delayed onboarding of other employees and pointing out the recent increase in CEO pay amidst mass layoffs.
- The Ministry of Electronics and IT is monitoring the situation closely to understand underlying causes and ensure job-linked incentives and skilling efforts remain strong national priorities.
What it means for the IT sector
- This is TCS’s largest layoff ever and the biggest mass job cut recorded in India’s IT industry to date. Other firms have yet to announce layoffs of this scale.
- Experts see this as part of a broader shift: AI and automation are reshaping the IT industry, forcing companies to cut costs, streamline operations, and demand higher skills and flexibility from employees.
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