Tata Consultancy Services (TCS) layoffs has shaken the IT job services.It is the India’s largest IT services company. It is the India’s second-most valuable company after Reliance having market cap ₹ 11,14,633 Crore. The company’s stock is trading at price ₹ 3079 currently. Its 52-week high/low are ₹ 4,592 / 3,056 respectively. The price earnings ratio is 22.7. Its ROCE and ROE are 64.6 % and 52.4 % respectively. In Q1, TCS announced ₹ 11 per share as an interim dividend. We have already discussed Q1 FY26 results of TCS in more detail in this website. The link is given below:
https://investmentgrip.com/tcs-q1-fy26/
Introduction:
Tata Consultancy Services (TCS), although it is a private company but due to its long-standing symbol of job stability in the tech industry, it becomes a dream of all the IT aspirants to join in the group. On 27 July, by surprising many, TCS has announced for its lay off plane of approximately 12,000 employees, which is about 2% of its global workforce, during the financial year 2026.
This surprised move of the company’s history, indicating a shift in strategy amid evolving client demands, emerging technologies, and internal efficiency drives.
Primarily, the TCS layoffs are affecting mid- and senior-level professionals and this reflects a broader IT industry as a trend. Now, even top-tier IT companies are rethinking about traditional staffing models.
Now TCS is preparing himself for future and this move is considered as part of its future journey. After this now the questions arise in every IT aspirant’s mind “what it means for the future of Indian IT employment?”
Latest Announcement
On July 27, 2025, Tata Consultancy Services (TCS) has declared significant workforce reductions officially. Out of about 613,000 as of June 2025, the company has planned to trim roughly 12,200 employees which is approximately 2% of its global workforce. This will be executed over the financial year 2026 that is spanning from April 2025 to March 2026.
Key details:
Scale & Timeline:
Scale & Timeline: These TCS layoffs will cover a span of Q2, Q3, and Q4 fiscal quarters, as the execution has planned to complete through Q4 FY26.
Affected Groups:
Primarily, these TCS layoffs are directed for mid- and senior‑level professionals. This includes long-tenured employees or those occupying roles with limited redeployment options.
Geographical Scope:
These TCS layoffs will be global and It will affect employees across all operating domains and regions not any specific geography.
Rationale from Leadership:
According to CEO K. Krithivasan, the reductions are not due to from AI replacing jobs, but from skill mismatches and the inability to redeploy certain roles effectively within the evolving technology landscape.
Protecting Client Services:
The company emphasized that there will be “no disruption” to client delivery during this transition. It’s completely a strategic move to build a future-ready and agile organization.
To the TCS layoffs employees, the company has announced to support such as Notice period pay, severance packages, and extended insurance benefits, outplacement help, counselling, and reskilling pathways where possible.
Driving Factors Behind the Layoffs
Slowing Client Demand & Macro Pressures
Although TCS reported 1.3% revenue growth in Q1 FY26 but its demand from clients has weakened as compared to previous quarters, especially in large multi-year contracts.
Due to economic uncertainties globally, IT budgets tightening and spending patterns cautiousness have led to project delays and which lead a decline in new deal flow.
AI‑Driven Automation & Productivity Gains
TCS is moving towards a transformation of AI-first delivery models and automation across services.
Analysts have noted that, Due to AI efficiencies, the need for traditional labor-intensive tasks has reduced and margin pressures have intensified. Hence, clients are demanding cost cuts of 20–30%.
Though CEO K. Krithivasan stated that,” TCS layoffs are not directly due to AI, he also acknowledges that evolving work models and operating methods are shifting the kind of skills that TCS needs”.
Impact & Reaction
Employee Impact
The TCS layoffs are mostly includes mid- and senior-level employees in which many of them are over 10 years at TCS.
In general, they are from managerial, support, or legacy tech roles, and were unable to be redeployed under TCS’s new skill-based model groups. According to new HR policy of the company, many of them receiving termination notices after failing to find internal roles within the 35-day bench limit.
Across social media and internal forums range some employees alleging that the TCS layoffs were abrupt and poorly communicated whereas TCS has also offered notice period pay, severance packages, counselling, and outplacement support.
Market Reaction
On both Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) TCS shares dipped down nearly 2% following the announcement of the layoffs.
Investors are also closely watching whether other IT majors like Infosys and Wipro will follow the same path or not!