Mumbai, India July 28, 2025, Tata Consultancy Services (TCS), India’s largest IT services firm, is set to lay off approximately 12,000 employees, accounting for about 2% of its global workforce. This marks the company’s largest ever workforce reduction.
TCS CEO K. Krithivasan clarified that the decision is not driven by automation or artificial intelligence. Instead, the move stems from a growing gap between employee skillsets and current business needs. Many employees, particularly those at mid and senior levels, have remained on the bench despite company-wide upskilling efforts.
The company has invested in AI training for over 550,000 employees, including more than 100,000 trained in advanced areas. However, the challenge lies in effective redeployment of these skilled workers to live projects.
TCS is now transitioning to a leaner, more agile delivery model, focusing on smaller, specialized teams instead of large, layered project structures. The goal is to improve adaptability, efficiency, and responsiveness to client demands.
The company assures that impacted employees will receive support measures, such as:
- Severance packages
- Extended health insurance
- Mental wellness support
- Career transition and outplacement assistance
The announcement has shaken market confidence, with shares of TCS and other IT giants falling by up to 3%.
Key Points:
- Layoffs Announced: 12,000 roles (approx. 2% of staff) to be cut
- Primary Reason: Skill mismatch and underutilization, not AI
- CEO’s Statement: Redeployment challenges behind decision
- New Strategy: Shift toward smaller, agile delivery teams
- Support Provided: Severance, health cover, counseling, job help
- Market Impact: IT stocks, including TCS, saw declines post news
