TCS to trim 12,000 jobs this fiscal, CEO says layoffs not AI-driven

Tata Consultancy Services Ltd (TCS) will cut about 2% of its global workforce, or around 12,000 jobs, over the course of the current fiscal year, the company said.

The reduction, which will primarily impact middle and senior-level employees, is part of a broader strategic overhaul to make the company “future-ready.”

TCS closed the June quarter with a headcount of 613,069, and the 2% reduction translates to around 12,200 roles.

While the company is investing heavily in employee reskilling, automation, and next-gen infrastructure, TCS emphasized that the layoffs stem from role realignment rather than cost-cutting due to AI.

“This is not because of AI giving some 20% productivity gains. This is driven by where there is a skill mismatch or where we think we have not been able to deploy someone,” CEO K. Krithivasan told Moneycontrol.

TCS said it has so far trained over 550,000 employees in basic AI and over 100,000 in advanced skills, while acknowledging that reskilling hasn’t always led to re-employment.

“Some people, especially at senior levels, find it difficult to transition to tech-heavy roles,” the CEO said.

The layoffs have already begun, with Mint reporting that around 100 employees were let go in Bengaluru over the past two weeks.

TCS’s move comes as the Indian IT industry undergoes sweeping changes in response to growing demand for AI, digital transformation, and automation.

HCLTech, the country’s third-largest IT services firm, recently flagged potential job reductions, while Wipro has mandated English-language assessments for senior executives. Those failing the assessment could be placed on performance improvement plans, raising concerns over covert restructuring.

The Ministry of Electronics and Information Technology (MeitY) is closely monitoring TCS’s workforce reduction, given the scale of the cuts and their potential employment impact, Moneycontrol reported.

The news rattled investor sentiment. Shares of TCS fell by up to 1.7% on Monday, while Infosys and Wipro also saw declines of up to 3.4%, amid broader concerns over sluggish demand and margin pressures across the IT sector.