Tata Consultancy Services (TCS), a leading IT services firm, is reportedly planning to reduce its global workforce by 2% over the next year, potentially impacting approximately 12,000 employees. This move is part of a strategic realignment to become a more agile and future-ready organization, adapting to rapid technological shifts, especially in artificial intelligence (AI). The workforce reduction is expected to primarily affect employees in middle and senior-level positions across various domains and geographies.
TCS CEO K Krithivasan explained that while the company has invested significantly in reskilling and upskilling its employees, redeployment has not always been effective. He clarified that this decision is not solely driven by AI, but rather a strategic move to address evolving skill requirements and deployment models within the company. The aim is to ensure TCS remains competitive and aligned with the changing demands of the tech industry.
The company has emphasized that it will handle the transition with compassion, offering affected employees severance packages, extended insurance benefits, notice period pay, and outplacement support. TCS also highlighted its ongoing reskilling and redeployment programs aimed at aligning its workforce with future-focused capabilities.
This announcement comes at a time when the IT services sector is undergoing a significant transformation, with companies increasingly focusing on digital transformation, AI integration, and operational efficiency. Recently, TCS implemented a new policy that limits the time an employee can remain without a billable project to just 35 business days per year. This policy mandates a minimum of 225 billable business days annually for all employees. Failure to meet this benchmark may impact an individual's compensation, career advancement, eligibility for overseas postings, and even job security.
The Nascent Information Technology Employees Senate (NITES) has raised concerns about the new benching policy, calling it "inhumane" and detrimental to mental health. Some employees have expressed concerns that the policy could be a precursor to mass layoffs, with one Reddit user stating, "This is the first step towards employment rationalisation based on utilisation. Brace for layoffs".
Other major IT companies like Wipro and Infosys have also initiated large-scale employee layoffs in early 2025, citing reasons such as automation, cost-cutting, and project delays. These layoffs have affected not only experienced professionals but also freshers, with many facing onboarding delays and job offer cancellations.
