Did TCS Trigger an Economic Earthquake with 2% Layoff Announcement?
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Synopsis
Congress leader Jairam Ramesh recently highlighted the alarming announcement from TCS regarding significant layoffs, calling it an economic earthquake. This event raises concerns about the future of employment in India's IT sector and the implications for workers affected.
Key Takeaways
- TCS is laying off 2 percent of its workforce, affecting over 12,000 employees.
- The layoffs are primarily impacting middle and senior management.
- Support for laid-off employees includes severance packages and job placement assistance.
- The decision is not driven by cost-cutting but by a skills mismatch.
- Labor unions are voicing concerns over the legality of the layoffs.
New Delhi, July 28 (NationPress) Congress leader Jairam Ramesh remarked on Monday that the announcement from Tata Consultancy Services (TCS) regarding the layoff of 2 percent, equating to over 12,000 employees, represents a significant tremor that has instigated an economic earthquake. The IT powerhouse, with a total workforce of 613,000 as of June 2025, intends to execute these layoffs across various sectors and regions. The firm indicated that the layoffs will predominantly affect middle and senior management roles. TCS CEO K Krithivasan characterized this decision as “one of the most challenging” he has made.
Ramesh noted in a post on X that TCS, which was founded by the remarkable F.C. Kohli and is considered a pride of India, has set off an economic earthquake with its announcement of a 2 percent layoff in upper management.
He further articulated that the reasoning behind this has been cited as a skills mismatch. Regardless of the explanation, the news is alarming, and the nation can only hope this is a temporary tremor,
According to reports, the company is providing severance packages, extended insurance, notice period pay, and assistance in securing new employment opportunities. TCS clarified that these layoffs are not driven by cost-cutting or automation, but rather by difficulties in redeploying talent whose current positions are no longer in sync with the company’s evolving skill needs. The IT giant is currently emphasizing the large-scale implementation of artificial intelligence (AI) and other emerging technologies, which are fundamentally altering demand across the IT industry.
The Nascent Information Technology Employees Senate (NITES) has reportedly lodged a formal complaint against TCS, claiming that “TCS has intended to dismiss thousands of employees without providing them with proper notice or any prior communication to the government, all of which are required under existing Indian labor laws.”
Meanwhile, the IT Ministry is monitoring TCS's decision to lay off more than 12,000 employees. India’s largest IT company announced its plans to reduce its workforce by 2 percent or approximately over 12,000 employees in FY26.
Point of View
The mass layoffs at TCS reflect the broader challenges facing the IT sector, including skills mismatches and the impact of rapid technological advancements. It is essential for the government, industry leaders, and workers to collaborate in finding solutions that ensure job security while adapting to an evolving workforce.
NationPress
30/07/2025
Frequently Asked Questions
Why is TCS laying off employees?
TCS is laying off employees due to a skills mismatch and the challenges of redeploying talent whose roles do not align with the changing skill requirements of the company.
How many employees are affected by the layoffs?
TCS announced that the layoffs will affect over 12,000 employees, which is approximately 2 percent of its workforce.
What support is TCS offering to laid-off employees?
TCS is providing severance packages, extended insurance, notice period pay, and assistance in finding new job opportunities for the affected employees.
Is this layoff decision related to cost-cutting?
No, TCS has clarified that the layoffs are not motivated by cost-cutting or automation, but rather by evolving skill requirements.
What is the reaction from labor unions?
The Nascent Information Technology Employees Senate (NITES) has filed a complaint against TCS, alleging improper notification regarding the layoffs, which violates Indian labor laws.
