Tata Consultancy Services (TCS), a leading IT services company in India, is reportedly offering severance packages of up to two years' salary to some long-serving employees as part of a restructuring effort. This move comes amidst shifting client demands, a push towards automation, and the integration of artificial intelligence (AI) into its operations.

Restructuring and Realignment

TCS is undergoing a significant workforce restructuring initiative, impacting primarily mid- and senior-level employees whose skills have become outdated or misaligned with the company's evolving business needs. The company aims to ensure its workforce is equipped to meet the demands of emerging technologies like AI, cloud computing, and data analytics. TCS CEO K Krithivasan described the restructuring as "one of the toughest decisions," largely impacting middle and senior-level employees.

Severance Packages

The severance packages offered by TCS vary based on the employee's tenure with the company. All impacted employees will receive a standard three-month notice period pay. Beyond that, the severance pay ranges from a minimum of six months to as much as two years' salary.

• Employees with 10 to 15 years of service are reportedly receiving severance payouts equivalent to about 1.5 years of salary.
• Employees with over 15 years of tenure are eligible for the highest packages, ranging between 1.5 and 2 years' salary.
• "Bench" employees who have been unassigned to any projects for more than eight months will only receive the three-month notice pay, without any additional severance.

Additional Support

In addition to severance pay, TCS is providing other forms of support to affected employees. These include:

• Early retirement options: TCS is offering early retirement options to eligible employees, providing full retirement benefits, including insurance, along with additional severance.
• Career transition support: The company is providing career transition support through outplacement services, covering agency fees for three months and, in some cases, longer for junior associates.
• Mental health assistance: TCS is also providing access to mental health support or therapists via its “TCS Cares” program in select situations.

Scope of Impact

In July 2025, reports indicated that TCS planned to reduce its workforce by approximately 2%, which amounts to roughly 12,000 employees. While some reports circulated on social media claimed that TCS was cutting a much larger number of jobs (e.g., 80,000), the company has dismissed these claims as inaccurate. TCS has stated that only a limited number of employees "have been affected by our recent initiative to realign skills in our organisation". Most of the layoffs and internal adjustments were reportedly completed between August and September 2025, though a small number of cases are still under review.

TCS's Perspective

TCS has emphasized that it is providing care and support to those affected by the restructuring. The company has stated that it is committed to ensuring a smooth transition for its employees and that it is making all efforts to provide appropriate benefits, outplacement, counseling, and support.

Industry Context

The restructuring at TCS is part of a broader trend in the IT industry, where companies are adapting to changing business priorities, the rise of automation, and the increasing importance of AI. Other major IT companies, such as Accenture and Microsoft, have also announced major job cuts in recent times.