TCS layoffs shake Indian IT: Mass exits show even ‘safe’ jobs aren’t untouchable

Tata Consultancy Services (TCS), the largest private employer in India, is set to lay off 12,200 employees by March 2026, marking the most substantial workforce reduction in the company’s five-decade history. This decision has sent ripples through India’s $245 billion IT sector, driven by increasing pressures from artificial intelligence (AI), evolving client needs, and stagnating revenue growth. The layoffs, affecting around 2% of TCS’s global workforce of 613,069, primarily target mid- and senior-level employees, particularly those with over a decade of experience. The company confirmed these layoffs in a statement released on Sunday, positioning the cuts as part of a broader strategy to enhance its future readiness. This involves workforce realignment, extensive AI deployment, and new investments in advanced technologies and markets. Roles at the greatest risk include non-client-facing managers and project leads who are locked into outdated delivery models, as well as specialists in legacy technologies who have been unable to update their skill sets to include in-demand areas such as cloud computing, data analytics, and AI. While TCS did not explicitly attribute the layoffs to AI, industry analysts, including Phil Fersht, CEO of HFS Research, have highlighted its significant impact. Fersht noted that AI is disrupting the traditional, people-centric service model, compelling major service providers like TCS to restructure their workforces in order to sustain profit margins and remain competitive in pricing. TCS CEO K. Krithivasan, who assumed leadership in June 2023, referred to the layoffs as “the toughest decision of my career.” He emphasized that the decision was not solely driven by AI or margin pressures. “We aim to be future-ready and agile,” he stated, mentioning that the company had explored internal redeployment and reskilling options before resorting to layoffs. Internally, however, some executives feel differently. An anonymous source within TCS indicated that the layoffs stem primarily from slow growth, arguing that automation and generative AI do not justify the dismissal of seasoned executives with extensive experience. Compounding the layoffs is a new, stringent bench policy implemented on June 12, 2025, which mandates that TCS employees log a minimum of 225 billable days each year. Employees who exceed the 35-day limit for unallocated time risk termination and potential loss of their experience certificates. Those on the bench must now dedicate 4–6 hours daily to upskilling while reporting to the office. TCS isn’t alone in this trend. HCLTech and Wipro have also begun reducing their workforce. HCLTech's CEO addressed analysts, noting cuts due to productivity improvements, while Wipro is focusing on senior management and has instituted mandatory English assessments. An internal email warned that failing the assessment could lead to a Performance Improvement Plan, often a precursor to layoffs. As TCS reported a 0.59% sequential revenue decline in the June 2025 quarter, analysts like Keith Bachman from BMO Capital Advisors caution that IT firms must either secure market share or tap into new AI-driven revenue streams to avoid stagnation. The layoffs at TCS, once considered a bastion of job security, signal a significant shift in the Indian IT landscape towards a more competitive and uncertain future.