TCS layoffs: IT ministry monitoring situation closely

India’s largest IT services firm, TCS, plans to lay off 12,261 employees—around 2% of its global workforce—this year.

TCS will reduce workforce by 2% or 12,261 employees primarily in middle and senior grades
Layoffs are skill and capability based, not driven by AI productivity gains
IT Ministry is monitoring and emphasising employment growth and skilling initiatives

The IT Ministry is closely monitoring Tata Consultancy Services’ (TCS) decision to lay off over 12,000 employees, news agency PTI reported, citing sources. It is in touch with the company and aims to understand the underlying reasons behind the move. Employment growth remains a key government priority, with initiatives like the Employment Linked Incentive Scheme aimed at boosting job creation. A strong emphasis is also being placed on skilling and reskilling efforts.

India’s largest IT services firm, TCS, plans to lay off 12,261 employees—around 2% of its global workforce—this year. The cuts will primarily impact middle and senior-level roles. As of June 30, 2025, TCS had a total workforce of 6,13,069, with a net addition of 5,000 employees in the April-June quarter.

The layoffs are part of a larger strategic shift. “TCS is on a journey to become a future-ready organisation. This includes strategic initiatives on multiple fronts, including investing in new-tech areas, entering new markets, deploying AI at scale for our clients and ourselves, deepening our partnerships, creating next-gen infrastructure, and realigning our workforce model.

“Towards this, a number of reskilling and redeployment initiatives have been underway. As part of this journey, we will also be releasing associates from the organisation whose deployment may not be feasible. This will impact about 2 per cent of our global workforce, primarily in the middle and the senior grades, over the course of the year,” the company said in a statement.

CEO K. Krithivasan clarified, “This is not because of AI giving some 20 percent productivity gains,” explaining the move stems from skill mismatches and not automation. “We will continue to look for high-quality talent,” he added, noting that TCS is upskilling over 550,000 employees in AI and emerging technologies.

Layoffs will be phased through FY26 and based on skills and capabilities. “It is essentially skill and capability based,” Krithivasan said. As TCS shifts away from traditional waterfall project models, the demand for layered leadership teams is decreasing. “When we did programs in the old waterfall method, we had multiple leadership teams. That’s changing,” he noted.

TCS has assured the process will be compassionate, with severance, counselling, and support offered to affected employees.

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