Bengaluru/Mumbai, India – Tata Consultancy Services (TCS) has announced a significant restructuring of its workforce, with plans to lay off over 12,000 employees globally. This marks the largest-ever downsizing by an Indian IT firm and has drawn considerable attention from employees, industry observers, and government bodies alike.

As of June 30, 2025, TCS reported a total workforce of 613,069 employees. The announced layoffs, affecting approximately 2% of its global headcount, are primarily concentrated in middle and senior-level positions.

Reasons Behind the Restructuring

TCS leadership has attributed the layoffs to a strategic shift aimed at transforming into a "future-ready organisation." The company emphasizes that the decision is driven by skill mismatches and the need for workforce realignment in response to evolving technological demands, particularly with the advent and deployment of Artificial Intelligence (AI). CEO K. Krithivasan clarified that the move is not a direct result of AI-driven productivity gains but rather a need to address skill gaps within the existing talent pool.

The company stated that a number of reskilling and redeployment initiatives were already underway, but for roles where deployment was not feasible, associates would be released.

Impact on Employees and Support Measures

For the affected employees, TCS has committed to providing a support package that includes:

• Notice period compensation
• Severance benefits
• Insurance coverage extension
• Outplacement assistance and counselling

TCS has expressed its intent to handle the transition with utmost care and compassion, ensuring no disruption to client deliverables.

However, the announcement has also brought to light concerns regarding TCS's new 'Bench Policy,' which reportedly limits an employee's duration on the bench (time between projects) to 35 hours annually. Allegations of forced resignations have surfaced following the introduction of this policy.

Government and Union Response

The significant scale of the layoffs has prompted swift reactions from Indian authorities.

• Karnataka Government: The Karnataka Labour Minister has sought clarity from TCS regarding the reasons behind the reported termination of 12,000 employees. The state's IT Minister, however, suggested the layoffs were a business decision and did not warrant state intervention, unless incentives for AI upskilling were needed.
• Union Labour Ministry: The Chief Labour Commissioner under the Union Labour Ministry has summoned top executives from TCS for a meeting to address concerns related to the mass layoffs and delays in onboarding new recruits.
• Employee Unions: The Karnataka State IT/ITeS Employees Union (KITU) has strongly objected to the layoffs, filing a complaint and claiming to have received numerous calls from employees reportedly being forced to resign. A conciliation meeting between KITU representatives and TCS management, in the presence of Labour Department officials, is slated for August 6.

Broader Implications for the Indian IT Sector

This unprecedented move by TCS has sent shockwaves across the Indian IT industry, raising questions about job security and the future trajectory of the sector. Industry experts suggest that the layoffs could be a harbinger of wider changes, as IT firms face challenging market conditions, declining business revenues, and the disruptive influence of AI. There is a growing concern that other Indian IT companies might follow suit with similar workforce rationalisation measures.

While the company's stock price has experienced a slump since the announcement, TCS is also reportedly considering freezing salary hikes for its remaining employees. The situation underscores a critical period of transformation for India's IT landscape, as companies recalibrate their strategies to adapt to a rapidly evolving global technology environment.