Tata Consultancy Services (TCS) to lay off 12,000 employees in FY2026 due to skill mismatches. CEO clarifies layoffs are not due to AI. Full details on impact, support measures, and market reaction.
TCS Layoffs 2025: Over 12,000 Employees Affected as Company Cites Skill Mismatch Over AI
Mumbai, July 27, 2025 – India’s largest IT giant Tata Consultancy Services (TCS) has confirmed that it will lay off over 12,000 employees globally in the financial year 2025–26. This amounts to nearly 2% of its workforce, making it one of the most significant restructuring efforts in the company’s history.
🚨 Why Is TCS Laying Off Employees?
According to TCS CEO K Krithivasan, the layoffs are not related to AI or automation, but due to a skill mismatch. The company is transforming its workforce structure to meet future digital demands and realign talent with project requirements.
“This is not driven by margins or AI replacing jobs. It is about ensuring we have the right people in the right roles,” said Krithivasan.
🎯 Who Will Be Affected?
- Employees with 10+ years of experience
- Mid-to-senior level managers
- Long-term bench employees (non-billable staff)
A new internal policy also mandates 225 billable days/year. Employees failing to meet this target may be at risk.
🤝 What Support Will TCS Provide?
Despite the large cuts, TCS is offering full support to those affected:
- Full notice period pay
- Severance packages
- Extended health insurance
- Career counseling & outplacement support
The HR team states the layoffs are being handled with “dignity and transparency”.
⚖️ Unions React: Layoffs “Unjustified”
Indian IT employee unions have strongly criticized the move. They claim:
- Layoffs violate ethical and legal norms
- Employees are being pressured to resign
- A call has been made for government intervention
Unions like FITE have urged affected workers to document communications and not resign under pressure.
📉 TCS Shares Drop Amid Market Uncertainty
Following the layoff news, TCS shares fell by 1.7%, signaling investor concern over:
- Revenue impact due to global slowdown
- Cost optimization strategies
- The shifting role of AI in service delivery
🌐 Industry Insight
The layoffs are part of a broader trend in the IT industry where firms are:
- Automating routine work
- Reducing non-performing talent pools
- Preparing for leaner, AI-ready operations
Other tech companies like Infosys and Wipro are also restructuring in similar ways.
📊 Summary: Key Points on TCS Layoffs 2025
| Topic | Details |
|---|---|
| Total Jobs Cut | 12,000+ globally (2% of workforce) |
| Reason | Skill mismatch, not AI |
| Who’s Affected | Mid-level managers, bench employees |
| CEO’s Statement | “Not AI-driven; focused on role alignment” |
| Support Measures | Severance, career counseling, insurance, notice pay |
| Union Stand | Opposes move; demands government attention |
| Market Impact | TCS shares fell 1.7% |
📌 Conclusion
TCS’s layoffs in 2025 highlight the growing need for upskilling, adaptability, and digital readiness in India’s IT sector. While the company ensures support for the affected staff, the decision raises deeper concerns about job security in an AI-driven future.
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