Tata Consultancy Services (TCS) is reportedly laying off approximately 2% of its global workforce, which amounts to 12,261 employees, primarily from middle and senior management. This decision has sparked considerable debate, particularly in light of the substantial compensation packages received by the company's top executives.
Executive Compensation
The annual report for FY25 reveals that TCS CEO K. Krithivasan earned ₹26.52 crore, a 4.6% increase from the previous fiscal year. His salary included a base salary of ₹1.39 crore, ₹2.12 crore in benefits, perquisites, and allowances, and a commission of ₹23 crore.
Other top executives also received significant compensation. N.G. Subramaniam, the former Chief Operating Officer and Executive Director, received ₹11.55 crore until his departure in May 2024. This included a base salary of ₹30 lakh, ₹7.24 crore in benefits and allowances, and ₹4 crore in commission. Non-executive directors Pradeep Kumar Khosla and Hanne Sorensen each received ₹2.74 crore, while independent director Keki Mistry received ₹3.06 crore, including ₹3 crore in commissions. TCS chairman N. Chandrasekaran received a sitting fee of ₹2.1 lakh.
Social Media and Public Reaction
The announcement of the layoffs, coupled with the disclosure of executive salaries, has ignited discussions on social media platforms like X, with many users questioning the fairness of the situation. Some users have suggested that top executives could take pay cuts to save jobs, while others have defended the CEO's compensation, arguing that TCS is a business, not a charity. Some posts read "Their lives wont be terrible at ₹2.5 crore pay vs ₹3 crore. For 12000 families, lives will be miserable at 0 pay vs ₹15 lacs,”. Another post read, “To build a 'stronger, future-ready company', 12,000 employees need to be sacked. Of course, the company is more important, what happens to the lives of 12,000 is of no consequence. K. Krithivasan, CEO TCS, makes ₹26 crores annually,”.
Reasons for Layoffs
TCS has stated that the layoffs are part of a broader strategy to become a "future-ready organization". The company aims to focus on investments in technology, AI deployment, market expansion, and workforce realignment. TCS CEO K Krithivasan said that the layoffs are due to skill mismatches and the inability to deploy certain employees, not primarily due to AI-driven productivity gains.
Impact and Concerns
The layoffs are expected to primarily affect middle and senior-level employees. This decision has raised concerns within the IT sector, which is already facing reduced demand and potential job losses due to the rise of artificial intelligence. Some analysts suggest that other companies facing similar challenges may follow TCS's lead. The IT employee welfare organization NITES has submitted letters to the labor ministry regarding "illegal layoffs" at TCS.
TCS is also reportedly freezing salary hikes and experienced hiring. This move, impacting cities like Hyderabad and Chennai, sparks industry-wide discussions and worries. The waiting period for experienced new hires to join has extended beyond 65 days and TCS has begun removing numerous inactive employees across its offices, implementing its new directive that requires unassigned staff to secure projects within 35 days or leave.
