TCS layoffs shake Indian IT: Mass exits show even ‘safe’ jobs aren’t untouchable

Tata Consultancy Services (TCS), India’s largest private employer, will lay off 12,200 employees by March 2026, marking the most significant workforce reduction in the company’s 50-year history. 

The move comes amid rising pressure from artificial intelligence (AI), changing client demands, and slow revenue growth, sending shockwaves across India’s $245 billion IT industry.

Mid- and senior-level employees in the line of fire

The layoffs were confirmed in a company statement issued on Sunday. TCS said the decision was part of a broader plan to become “future-ready,” involving realignment of the workforce, AI deployment at scale, and new investments in next-gen technologies and markets.

“As part of this journey, we will also be releasing associates from the organization whose deployment may not be feasible,” the company stated. The job cuts will affect around 2% of TCS’s global workforce of 613,069, largely targeting mid- and senior-level employees—especially those with 10 or more years of experience.

Roles most at risk include non-client-facing managers, project leads in outdated delivery models, and legacy technology specialists who have not successfully transitioned to high-demand skillsets like cloud, data, or AI.

The perfect storm

While TCS did not officially cite AI as the primary cause, several analysts reportedly call it a central factor. Phil Fersht, CEO of HFS Research, was quoted as saying in a Mint report, “The impact of AI is eating into the people-heavy services model and forcing the large service providers such as TCS to rebalance their workforces to maintain their profit margins and stay price competitive.”

Fersht added that this trend could last for at least a year, with companies focusing on training junior employees to work with AI tools and letting go of those who cannot align with a new “services-as-software” model.

Clients are now demanding 20–30% price reductions in service contracts, putting further pressure on margins. The result is a hard pivot to automation, fewer billable hours, and streamlined staffing.

'Toughest decision': CEO Krithivasan 

CEO K. Krithivasan, who took charge in June 2023, described the layoff as “the toughest decision of my career.” He stressed the move was not driven by AI alone or by margin-chasing. “We want to be future-ready and agile,” Krithivasan said, adding that the company had attempted internal redeployment and reskilling before turning to cuts.

But internally, some executives disagree. A TCS insider told Mint on the condition of anonymity, “This round of layoffs is completely on account of slow growth. Automation and GenAI cannot be displacing executives with 10 or more years of experience.”

The layoffs are compounded by a harsher bench policy, effective since June 12, 2025. Under the new rules, TCS employees must log at least 225 billable days annually. The maximum allowed unallocated (bench) time is 35 calendar days per year. If that limit is exceeded, employees face job termination and possible loss of experience certificates.

Employees on bench are now required to work 4–6 hours per day on upskilling, and must report to the office during this time. According to Mint, at least 100 employees in Bengaluru have already been asked to leave over the past two weeks under these conditions.

Wipro, HCLTech too

TCS isn’t alone. HCLTech CEO C. Vijayakumar said on an analyst call that the company has already “released” a number of people due to productivity gains, adding that some skills are now redundant due to automation.

At Wipro, the focus has shifted to senior management. The company has introduced mandatory English communication assessments. An internal email, accessed by Mint, warned: “Not clearing it in one attempt will result in a Performance Improvement Plan (PIP),” often seen as a precursor to layoffs. Wipro did not respond to a request for comment.

A new reality for IT professionals

TCS reported a 0.59% sequential revenue decline in the June 2025 quarter—the weakest among the top five IT firms. Between July 2023 and June 2025, TCS grew revenue at just 0.34% CAGR in dollar terms, compared to 0.85% for Infosys and 1.29% for HCLTech.

As AI efficiencies promise long-term productivity gains of 20–30%, analysts like Keith Bachman of BMO Capital Advisors warn that IT firms will either need to gain market share or capture new AI-linked revenue streams—or face stagnation.

The layoffs at TCS, once seen as a haven for lifetime employment, are a clear signal: Indian IT has entered a new era of ruthless recalibration.