Mumbai, July 27, 2025: Tata Consultancy Services (TCS), India’s largest IT services firm, is set to reduce its global workforce by around 2%—translating to over 12,000 jobs—during the financial year 2026. This move will predominantly affect middle and senior-level employees, according to a recent report by Reuters.
The company has stated that the reduction is part of a broader transformation strategy that includes embracing new technologies, expanding into emerging markets, and deploying artificial intelligence (AI) at scale.
AI and Skill Realignment Drive the Cuts
In an interview with Moneycontrol, TCS CEO K Krithivasan emphasized that the shift is not merely about reducing headcount but preparing the company for the future. “With rapid advancements in AI and evolving operating models, we are compelled to realign our workforce. Although we’ve invested heavily in skilling and redeployment, certain roles remain redundant,” he said.
Krithivasan clarified that the layoffs are not a result of AI-driven productivity replacing human labor, but a reflection of evolving business needs. “This is about feasibility and future readiness, not downsizing due to AI,” he added.
Service Delivery Will Remain Unaffected
TCS has assured that the transition will be managed carefully to ensure uninterrupted service to clients. “This shift is being executed with meticulous planning to avoid disruption in our service commitments,” the company said in a statement.
A Strategic Pivot Towards Future Technologies
TCS is actively reshaping its operational strategies to align with ROI-focused AI applications. Executive Director and COO Aarthi Subramanian noted, “Our clients are increasingly seeking ROI-led AI solutions. We’re investing across the AI ecosystem—from infrastructure to intelligent agents—to meet that demand.”
Industry-Wide Layoffs Continue
TCS’s restructuring comes amid widespread job cuts across India’s tech and startup ecosystem. Companies like Byju’s, Dunzo, and Ola Electric have made significant layoffs over the last two years:
- Byju’s: Over 3,000 employees laid off between late 2023 and April 2024
- Dunzo: Reduced 30% of its workforce in early 2023
- Ola Electric: Cut more than 1,500 jobs between November 2024 and March 2025
These layoffs highlight a broader trend of cost-cutting and operational efficiency in India’s corporate sector as companies navigate an evolving tech landscape and increasing reliance on automation and AI.
Key Takeaways:
- TCS to cut 2% of its global workforce in FY26 (~12,200 roles)
- Focus areas: Middle and senior management roles
- Primary reason: Realignment for AI, new technologies, and evolving business models
- TCS assures no impact on client service delivery
- Part of a broader trend of tech sector layoffs across India