In a move that has stirred the Indian IT sector, Tata Consultancy Services (TCS) has announced plans to cut approximately 12,000 jobs, or 2% of its global workforce, during FY26. Contrary to speculation, CEO K Krithivasan has firmly stated that artificial intelligence is not the reason behind this decision.
What’s Driving the Layoffs?
Krithivasan emphasized that the layoffs stem from skill mismatches and redeployment challenges, not AI-led productivity gains. Despite extensive upskilling efforts—training over 5.5 lakh employees in basic AI and 1 lakh in advanced AI skills—many employees, especially at mid-to-senior levels, have struggled to transition into tech-heavy roles.
“This is not because of AI giving some 20% productivity gains. This is driven by where there is a skill mismatch or where we think we have not been able to deploy someone,” said Krithivasan.
Structural Shifts in Delivery Model
TCS is undergoing a strategic transformation, moving away from the traditional waterfall project management approach to a more agile, product-centric model. This shift has reduced the need for conventional project and program managers, particularly those in layered leadership roles.
“Earlier, in waterfall models, we had multiple leadership layers. That’s changing,” Krithivasan explained.
Who Will Be Affected?
The layoffs will be phased across FY26, primarily impacting:
- Mid-level and senior professionals
- Junior staff with prolonged bench time (not deployed on any project)
TCS has also revised its HR policies, mandating 225 billable days annually and capping bench time at 35 days, further tightening deployment criteria.
Support for Affected Employees
TCS has pledged to handle the layoffs with compassion and care, offering:
- Notice-period pay
- Severance packages
- Extended health insurance
- Mental health counselling
- Outplacement support
Krithivasan assured that impacted employees will be given opportunities for internal redeployment before final decisions are made.
Future Outlook
Despite the layoffs, TCS remains committed to hiring high-quality talent and investing in new technologies and markets. The company views this restructuring as essential to becoming a future-ready organization, capable of navigating rapid technological shifts and evolving client demands.
Conclusion TCS’s decision to cut 12,000 jobs is not a reaction to AI automation, but a strategic recalibration to align talent with emerging business models. As the IT landscape evolves, adaptability and continuous learning will be key—not just for companies, but for professionals across the board.
Top-notch SEBI registered research analyst
Best SEBI registered Intraday tips provider
Telegram | Facebook | Instagram
Call: +91 9624421555 / +91 9624461555