Tata Consultancy Services (TCS), India's largest IT services company, is set to lay off nearly 12,000 employees — approximately 2% of its global workforce — as part of a major restructuring initiative. The move, one of the largest workforce realignments in the company’s history, is being driven by a widening skills gap and a strategic shift in delivery models.
In an exclusive interview with Moneycontrol, TCS CEO and MD K Krithivasan clarified that the layoffs are not due to artificial intelligence (AI) replacing human roles. “This is not about AI yielding 20% productivity gains,” he said. “The decision is based on skill mismatches and the inability to deploy certain employees effectively.”
Who Is Affected?
The layoffs, expected to roll out over the course of FY26, will primarily target mid- to senior-level professionals. Affected employees also include junior staff who have remained on the "bench" — not assigned to active projects — for extended periods.
Despite robust internal upskilling efforts, including training over 550,000 employees in basic AI and more than 100,000 in advanced technologies, TCS is facing difficulties in redeploying many of its reskilled professionals. Senior executives, in particular, are finding it challenging to adapt to increasingly tech-intensive roles.
“This disconnect between training and actual redeployment has made workforce rationalization unavoidable,” Krithivasan noted.
Strategic and Structural Overhaul
The layoffs come as TCS undergoes a fundamental transformation in its operational approach. The company is moving away from traditional “waterfall” project management toward a more agile, product-centric model. This shift reduces the demand for conventional project and program managers, especially those overseeing multiple layers of management.
The transition is part of TCS’s broader strategy to remain competitive in a rapidly evolving global tech landscape.
While the restructuring may cause short-term disruption, TCS maintains that the move is essential to align its workforce with emerging technology trends and client demands.
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