TCS to remove 12,000 Employees from Job, But Why? Know Here

India’s largest IT services company, Tata Consultancy Services (TCS), has announced that it will reduce its workforce by around 2% over the next year. This means that over 12,000 employees, mostly in middle and senior management, will be affected. The decision is part of TCS’s larger plan to become more agile and better prepared for future challenges, according to CEO K Krithivasan, who spoke to Moneycontrol in a recent interview.

Why Is TCS Reducing Jobs?

TCS CEO (K. Krithivasan) explained that the entire IT industry is going through big changes. New technologies, especially Artificial Intelligence (AI), and changing work models are pushing companies to adapt quickly. Krithivasan said that TCS wants to be ready for the future, and for that, the company needs to review its structure and workforce.

He mentioned that the company is actively using AI and examining the kind of skills that will be important in the coming years. While TCS has invested in training and giving employees new opportunities, some teams could not be redeployed successfully, which led to the decision to eliminate certain roles.

As of June 2025, TCS had around 6.13 lakh employees globally. A 2% reduction translates to approximately 12,200 people losing their jobs. However, the job cuts will mostly affect mid-level and senior employees — not entry-level or junior staff.

The CEO also clarified that AI is not the direct cause of these layoffs. Instead, he said it’s about ensuring the right skills are available in the company and making redeployment practical. He added, “It’s not that we need fewer people, but that we need people with different skills.”

While TCS insists that AI is not the reason for the layoffs, industry experts believe otherwise. Over the past few years, many companies have silently replaced certain job roles with automation and AI tools, especially in areas like manual testing and routine coding tasks. Senior employees who find it hard to learn new technologies are more at risk of being replaced.

This trend isn’t limited to TCS. Other big tech firms have also been reducing staff quietly, while increasing reliance on automation — even though they rarely admit that AI is the reason.

Support for Affected Employees

TCS has said it will support the impacted employees by offering Severance packages, Salary for the notice period, Extended health insurance and Help in finding new jobs (outplacement assistance). This support is meant to make the transition easier for employees who are losing their jobs.

The CEO also spoke about TCS’s bench policy, which refers to employees who are not assigned to any client project at a given time. He said the new approach is not about cost-cutting, but about encouraging employees to stay engaged and find projects quickly. This will help them remain productive throughout the year.

TCS Still Hiring in Some Areas

Interestingly, despite the announcement of layoffs, TCS actually added 6,071 new employees in the April–June quarter of FY25. On a net basis, the company’s workforce grew by 5,090 people. This shows that while some roles are being cut, new roles that match the company’s future needs are also being created.

TCS’s decision signals a shift in focus from headcount to skillset. The company wants to ensure that its workforce is aligned with modern technologies and changing client demands, rather than simply maintaining large numbers of employees.