Tata Consultancy Services (TCS), India’s largest IT services company, has reportedly confirmed that it will cut 2 per cent of its workforce – over 12,000 employees – by the end of the current financial year (April 2025–March 2026).

The move is part of a wider restructuring strategy aimed at making the company “future-ready and agile” as it adapts to changing client needs and evolving workplace models, reported Moneycontrol.

The job cuts will span TCS’s global operations, hitting staff across functions and geographies, with the bulk of redundancies expected among middle and senior-level roles. The company currently employs 6.13 lakh people, meaning the planned reduction will affect around 12,200 employees.

“This has not been an easy decision,” CEO K Krithivasan told the news organisation. “We have been deploying AI at scale and evaluating skills we will be requiring for the future. Still, we find that there are roles where redeployment has not been effective. This will impact roughly 2 per cent of our global workforce, primarily at middle and senior levels.”

‘This is not because of AI’

Krithivasan stressed that the cuts are not about artificial intelligence replacing workers. “This is not because of AI but to address skills for the future. This is about feasibility in deployment, not because we need less people,” he said.

The company said affected staff will receive severance packages, extended insurance cover, and outplacement assistance.

The announcement follows a recent tightening of TCS’s “bench policy,” under which employees must log 225 billable days each year and spend no more than 35 days without a project. Workers on the bench for over two months are now being asked to resign, with severance packages offered – but only if they leave voluntarily.

A Difficult Quarter for TCS

The decision comes shortly after TCS reported a mixed set of first-quarter results. Net profit rose 6 per cent year-on-year to Rs 12,760 crore, but revenue slipped 3.1 per cent to Rs 63,437 crore.

While layoffs are largely tied to skill realignment, analysts note that automation and AI are reshaping demand, leaving traditional roles such as manual testing less relevant. TCS has also delayed onboarding for around 500 lateral hires and faces a slightly elevated attrition rate of 13.8 per cent.

The company insists, however, that it remains committed to growth. “If the macroeconomic environment improves and business picks up, we will certainly offer the best possible hikes as we usually do,” said Chief HR Officer Milind Lakkad.