Is TCS Planning to Lay Off 12,000 Employees in FY26 Due to Tech Transition?
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Synopsis
Tata Consultancy Services is reportedly planning significant layoffs affecting 12,000 employees in FY26 as part of a restructuring strategy aimed at adapting to evolving technologies. This initiative reflects the changing landscape in the IT sector and the company's commitment to future readiness. Discover how TCS is navigating these challenges.
Key Takeaways
- TCS plans to lay off 12,000 employees as part of restructuring.
- The layoffs will impact around 2 percent of the workforce.
- Focus on AI and new technologies is driving this decision.
- Affected employees will receive severance packages and support.
- TCS continues to invest in advanced AI skills for its workforce.
Mumbai, July 27 (NationPress) The tech behemoth Tata Consultancy Services (TCS) is reportedly set to lay off approximately 12,000 employees in FY26 as part of a significant restructuring initiative, according to various reports released on Sunday.
This move, impacting about 2 percent of its global workforce, aims to prepare the company for the future and enhance its agility in response to swiftly changing technologies and workplace dynamics.
TCS, which had a workforce of 613,000 employees as of June 2025, will carry out the layoffs across numerous sectors and regions.
The majority of those affected are expected to be in middle and senior management roles. Reports indicate that this decision is not primarily driven by cost-cutting measures or automation, but rather stems from difficulties in redeploying talent whose current roles are misaligned with the company’s evolving skill needs.
The organization is focusing on large-scale implementation of artificial intelligence (AI) and other innovative technologies that are transforming demand within the IT industry.
While TCS has clarified that AI is not directly displacing jobs, analysts suggest that roles such as manual testing are diminishing, and some senior professionals are finding it challenging to adjust to the newer, technology-centric environments.
To assist the employees impacted, the company is providing severance packages, extended health insurance, notice period compensation, and support in securing alternative employment opportunities.
This announcement follows TCS's report of a net profit of Rs 12,760 crore for Q1 FY26, showcasing a year-over-year growth of 6 percent.
Revenue from operations increased by 1.3 percent to Rs 63,437 crore during the April-June quarter. The company also announced an interim dividend of Rs 11 per share.
CEO K. Krithivasan attributed the company’s stable performance to robust deal closures and an increasing demand for new services, despite ongoing global macroeconomic and geopolitical uncertainties affecting client expenditures.
He emphasized the company’s continuous investments in the AI ecosystem, which includes infrastructure, data platforms, and business applications.
Currently, TCS has over 114,000 employees trained in advanced AI skills, and during the last quarter alone, associates dedicated 15 million hours to enhancing their knowledge in emerging technologies.
Point of View
It's crucial to recognize TCS's strategy amidst the dynamic landscape of the IT industry. This restructuring not only reflects the necessity for businesses to adapt but also highlights the challenges faced by professionals in transitioning roles. Our focus remains on the impact these changes have on employees and the broader implications for the tech sector.
NationPress
27/07/2025
Frequently Asked Questions
What is the reason behind TCS's layoffs?
The layoffs are primarily part of a restructuring strategy to adapt to new technologies and evolving skill requirements rather than being driven by cost-cutting or automation.
How many employees will be affected by the layoffs?
Approximately 12,000 employees, or about 2 percent of TCS's global workforce, are projected to be laid off.
What support is TCS providing to affected employees?
TCS is offering severance packages, extended health insurance, notice period pay, and assistance in finding alternative job opportunities.
How is TCS performing financially?
TCS reported a net profit of Rs 12,760 crore for Q1 FY26, reflecting a year-on-year growth of 6 percent, with operational revenue rising by 1.3 percent.
What investments is TCS making in technology?
TCS is heavily investing in the AI ecosystem, including infrastructure, data platforms, and business applications to enhance its service offerings.
