TCS slashing jobs this year: CEO Krithivasan says AI isn’t why 12,000 employees will be let go

Tata Consultancy Services (TCS) is cutting 12,000 jobs—2% of its global workforce—not to chase AI-driven efficiency, but because the IT giant says it can no longer reassign employees whose skills no longer fit its evolving business. CEO K Krithivasan called it a hard but necessary reckoning. 

The move marks one of the most significant workforce reductions in the company’s history. Most of the impacted employees will be mid-to-senior level staff, with some junior-level workers also affected, particularly those on extended bench time.

“This is not because of AI giving some 20 percent productivity gains,” Krithivasan was quoted as saying in a detailed interview to Moneycontrol. 

“This is driven by where there is a skill mismatch, or, where we think that we have not been able to deploy someone.”

TCS has invested in training, including AI upskilling for over 550,000 employees at basic levels and 100,000 at advanced levels. Yet, retraining hasn’t ensured placement for everyone. Senior employees, in particular, often face hurdles in adapting to new tech roles.

The company’s shift to a more agile, product-aligned model has also reduced the demand for traditional project and program managers. “When we did programs in the old waterfall method, we had multiple leadership teams. That’s changing,” Krithivasan explained.

The layoffs will be implemented gradually over FY26 and are not tied to any particular geography or domain. “It is essentially skill and capability based,” he said.

Krithivasan called the decision difficult and unprecedented. “We will do it in a very, very compassionate way,” he said, outlining plans for severance benefits, extended insurance, counseling, and outplacement support.

Despite the reductions, TCS remains committed to acquiring and developing talent. “We will continue to look for high-quality talent,” the CEO said. “This is not a question of demand. It is a question of we being future ready.”