TCS to axe 12,000 jobs; IT giant's biggest layoff ever
BENGALURU/MUMBAI: In what will be its biggest layoff to date, India's largest IT services company and Tata Group's most-profitable unit, TCS, will axe 12,261 jobs, which is approximately 2% of its workforce as AI-led disruptions and macro uncertainties affect business demand.
TCS, chaired by N Chandrasekaran, had just over 6.1 lakh employees worldwide as of June. The company has been periodically restructuring its workforce in response to changing business dynamics and other factors. In FY15, it eliminated more than 3,000 jobs, representing about 1% of its total employee count.
The latest job cuts will primarily affect mid-level and senior executives. This move marks one of the company's most significant strategic shifts: embracing AI, and letting go of employees who cannot be redeployed within the firm.
The workforce reduction — long considered rare in the industry — underscores the tough demand environment, especially in the absence of large deals like BSNL. Industry observers see this as an early sign of a broader shift, where rising reliance on automation and margin pressures are driving companies to reduce employee costs.
TCS said the restructuring initiative is aimed at transforming the company into a future-ready organisation.
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'This includes strategic initiatives on multiple fronts, and while these changes are necessary for our growth and evolution, we understand the impact on our colleagues. We thank them for their service and are committed to supporting them through this transition,' TCS CEO K Krithivasan said in an email to employees.
Phil Fersht, CEO of HfS Research, said the impact of AI is eating into the people-heavy services model and forcing the large providers to rebalance their workforces to maintain their margins and stay price competitive in a cut-throat market where clients are demanding 20-30% price reductions on deals.
Other Tata Group entities, such as Tata Steel and Tata Motors, have also been cutting jobs periodically to lower costs and enhance profitability. In 2019, Tata Steel eliminated 3,000 jobs in its European operations.
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