In 2025, TCS to cut more jobs became one of the most talked-about headlines in India’s IT industry, after reports confirmed that Tata Consultancy Services (TCS) is planning a major workforce realignment. The company announced that up to 2 percent of its employees — nearly 12,000 people — could be affected over the fiscal year 2026, with the majority of the impact expected across middle and senior management levels.
What TCS Has Announced & What It Means
The Official Stance
TCS leadership, particularly CHRO Sudeep Kunnumal, has repeatedly said there is no fixed “layoff target”. The company will continue to evaluate all employees based on performance, redeployment potential, and alignment with evolving business needs.
So far, TCS claims about 1 percent of the plan has been implemented — roughly 6,000 people released — with the rest to follow as needed.
The headcount drop in the recent quarter (~20,000 people or ~3 percent) is explained by TCS as resulting from both voluntary resignations and involuntary attrition, not solely forced cuts.
Among its countermeasures, TCS has rolled out wage increases for over 80 percent of its workforce, effective September 1.
Underlying Drivers
Skill Gaps & Technology Evolution
TCS is shifting more toward AI, cloud, automation, analytics, and digital transformation. Certain legacy roles or skillsets may no longer fit future project needs, prompting exits or reskilling.
The firm has also formed a dedicated AI & Services Transformation unit to centralize its AI initiatives.
Client & Market Stress
Across the IT services sector, clients are under pressure to reduce costs, delay discretionary spends, or rethink long-term contracts. To retain margins, TCS must right-size its cost base.
Localization & Visa Policy Shifts
TCS is reducing its reliance on H-1B visas in the U.S. and hiring more locally. The company says only ~500 associates have been deployed on H-1B recently.
Conclusion
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