TCS CEO Explains Reasons Behind Mass Layoffs
Tata Consultancy Services, India’s largest IT services firm with a workforce of about 613,000 as of June 2025, has disclosed plans to reduce its global headcount by approximately 2%, which translates to just over 12,000 jobs, during its Financial Year 2026 (starting April 2025).
‘Decision not driven by AI’: TCS CEO
TCS CEO K. Krithivasan clarified that the decision to cut roughly 12,000 jobs over FY 2026—is not driven by AI automation or productivity gains. Instead, the primary reason is a mismatch in skills:
Despite training over 550,000 employees in basic AI and over 100,000 in advanced skills, some associatescould not be redeployed effectively.
He pointed to the company’s ongoing transition from a project-based waterfall model to a product-centric agile structure, which has reduced the need for traditional project and program managers, especially at mid and senior levels. Labeling the move as “difficult but necessary,” TCS CEO Krithivasan reaffirmed that TCS would offer compassionate offboarding support, including severance packages, extended health coverage, and career transition assistance.
Speculations regarding TCS Layoffs
Macro‑economic slowdown: Global demand for IT services is softening, especially for discretionary technology spending amid inflation and trade uncertainty
AI‑driven business transformation: TCS is accelerating the adoption of AI and automation, reshaping traditional labor‑intensive service models and reducing the need for certain roles
Strategic workforce realignment: The company is retraining and redeploying employees into emerging technology areas and new markets, though some roles—especially mid‑ and senior‑level deployments deemed non‑feasible—are being eliminated
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TCS Layoffs: Who is affected?
About 12,200 roles within the middle to senior management levels globally are expected to be impacted, while junior-level positions are largely spared
TCS has committed to providing severance packages, outplacement support, insurance extensions, and career counseling to affected employees
Timeline & Context
The layoffs are scheduled to unfold across FY 2026 (April 2025–March 2026), with announcements made on July 27, 2025
This move comes amid broader industry challenges—top Indian IT players also reported slowdowns in hiring during Q1 and Q2 of FY 26
