TCS slashing jobs this year: CEO Krithivasan says AI isn’t why 12,000 employees will be let go

Tata Consultancy Services (TCS) has announced a significant reduction in its workforce, with plans to cut 12,000 jobs, which represents about 2% of its global staff. This decision is not attributed to the increasing efficiency brought about by artificial intelligence, but rather to a mismatch in skills as the company adapts to its changing business landscape. CEO K Krithivasan described this as a challenging yet essential step for the company. The layoffs, which will primarily affect mid-to-senior level employees, also include some junior staff who have been on extended bench time. In an interview with Moneycontrol, Krithivasan clarified that the decision was not a direct result of AI contributing to productivity gains but rather due to difficulties in redeploying employees whose skills no longer align with the company’s needs. TCS has invested significantly in training initiatives, focusing on upskilling over 550,000 employees at basic levels and an additional 100,000 at advanced levels in AI. However, this retraining has not guaranteed job placement for all, particularly for senior employees who often struggle to transition into new technology roles. The company's shift towards a more agile and product-oriented operational model has also diminished the demand for traditional project and program management roles. Krithivasan noted that the layoffs would be executed gradually throughout fiscal year 2026, and they will not be confined to specific regions or sectors. Instead, they will focus on the skills and capabilities of the workforce. He acknowledged the difficulty of this decision, stating, "We will do it in a very, very compassionate way," and outlined plans for providing severance packages, extended health insurance, counseling services, and job placement assistance for those affected. Despite these workforce reductions, TCS remains dedicated to seeking out and nurturing talent, affirming that the focus is on being prepared for the future rather than a lack of demand for services.