TCS Layoffs 2025: Big Job Cuts & Future Strategy Revealed
India’s leading IT company, Tata Consultancy Services (TCS), has recently announced that it will cut around 2 percent of its global workforce in the financial year 2026. These TCS layoffs will impact nearly 12,000 employees, primarily from middle and senior management levels. Currently employing over 613,000 people worldwide, this move marks the biggest layoff in the company’s history.
This development is significant not only for the IT sector but also for the Indian economy as a whole, as TCS is the country’s largest software services company. The impact of the TCS layoffs could ripple across multiple industries. Here’s a detailed look at the reasons behind the layoffs, the company’s future plans, the broader implications, and the reactions from employees and the government.
Layoffs at TCS Triggered by Skill Mismatch
TCS CEO K. Krithivasan, while announcing the TCS layoffs, clarified that the decision stems from evolving business and technological needs. He emphasised that the move is not due to an economic downturn or mass automation through AI but rather because of a “skill mismatch” — the growing gap between employee skills and the company’s current business demands.
To maintain its competitive edge in a rapidly changing technological landscape, the company is investing heavily in AI, data analytics, cybersecurity, cloud computing, and IoT (Internet of Things). Simultaneously, it is working to modernise its delivery model and explore new markets. These strategic and technological shifts are rendering certain existing skills obsolete, making it necessary to realign the workforce with future requirements.
TCS Rolls Out Reskilling and Support Programmes
To help employees navigate this transition, TCS has launched several reskilling and redeployment initiatives. The company believes that many employees, whose current roles are no longer relevant, can adapt to new positions through these programmes. However, those who cannot be redeployed will inevitably face layoffs.
TCS has assured that affected employees will receive full notice periods, attractive severance packages, outplacement assistance, career counselling, and continued health insurance benefits to secure their future.
Krithivasan stated, “This decision was not easy, but our priority is to make the organisation future-ready. We will continue to train new talent and work closely with those who are prepared for constant change.”
TCS Layoff Announcement Hits Stock Market
Following the announcement, TCS shares slipped by nearly 2 percent. The Nifty IT index, along with shares of other major IT players like Infosys and Wipro, also came under pressure. Investors appeared concerned about the immediate and long-term performance of the company in light of this restructuring.
Analysts noted that such layoffs indicate that technology companies are realigning strategies to keep pace with the fast-evolving tech environment. However, they also highlighted the challenge of retraining employees quickly enough to match the speed of technological change.
Government Pulls Up TCS Over Onboarding Delays
Last month, Pune-based IT union Nascent Information Technology Employees Senate (NITES) accused TCS of delaying the onboarding of nearly 600 experienced lateral hires, affecting their career growth.
The Ministry of Labour and Employment took note of the issue and reprimanded TCS, summoning the company’s Chairman and Managing Director to a joint discussion at the Central Labour Commissioner’s office on 1 August 2025. The government stressed that companies must remain sensitive to employees’ futures and ensure that all hiring and layoff processes remain transparent, fair, and compliant with labour laws.
This situation reflects the growing pressure on TCS over its “new bench policy” and layoffs, and the rising discontent among employees. Experts believe government oversight and union activism will push the company to take more employee-friendly measures.
TCS’s ‘Project Fluidity’ and Global Expansion Focus
TCS envisions leading in emerging domains like AI, cloud, cybersecurity, IoT, and data science in the coming decades. Through its ‘Project Fluidity’ initiative, the company is emphasising flexibility in its workforce and delivery models. This initiative encourages the widespread adoption of AI-powered tools and automation to make operations faster, more efficient, and cost-effective.
To expand into new markets, TCS is focusing on regions like Southeast Asia and Latin America, aiming to leverage local talent to manage regional projects. For this global growth strategy to succeed, the company will need employees with advanced, future-ready skills — a key reason why it must phase out roles tied to outdated competencies.
New Opportunities and Challenges for Employees
For TCS employees, this is a time of both challenge and opportunity. By participating in reskilling programmes, they can reposition themselves in emerging tech areas. The company’s outplacement services will also help those impacted find new employment opportunities.
At the same time, employees must continuously upgrade both their technical and soft skills to stay relevant in the fast-changing IT landscape. Keeping pace with industry demands will be crucial for career success in the sector.
Impact on the Broader Economy and IT Industry
Mass layoffs by India’s largest IT firm are bound to affect the wider economy. The IT sector, a major contributor to India’s GDP and foreign exchange earnings, could send worrying signals if such layoffs continue. The departure of a significant number of mid- and senior-level professionals could disrupt career trajectories and intensify unemployment concerns, particularly in times of economic slowdown.
On the other hand, industry observers believe that the IT sector will continue to evolve and reposition itself in new growth areas. In this transition phase, short-term disruptions may be the price companies pay for long-term stability and competitive advantage.
Conclusion
Tata Consultancy Services’ ongoing TCS layoffs and restructuring reflect its strategy to adapt to rising competition and rapid technological changes. Though this step has caused hardships for employees, the company has pledged to support affected staff with compassionate layoff processes and effective reskilling programmes.
Government and union intervention is likely to keep the company mindful of employee welfare as it forges ahead. Ultimately, TCS is gearing up to meet future technological challenges to maintain its dominance and standing in the market.
This story is not just about one company but mirrors the broader IT industry and the economy at large, which continue to flow with the tide of technological transformation.
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