TCS Announces Layoffs of 12,261 Employees, Primarily Affecting Mid and Senior Level Staff

India's leading IT services provider, Tata Consultancy Services (TCS), plans to reduce its global workforce by 2%, affecting 12,261 employees, mainly in middle and senior positions. As of June 30, 2025, TCS employed 6,13,069 people, having added 5,000 new employees in the April-June quarter. This decision aligns with TCS's strategy to prepare for the future by investing in technology and realigning its workforce.

Focus on Future-Ready Initiatives

TCS is undertaking several strategic initiatives to become a future-ready organisation. These include investments in new technologies, expanding into new markets, and deploying AI at scale for clients and internally. The company is also deepening partnerships and creating next-generation infrastructure while realigning its workforce model. As part of this transformation, TCS is implementing reskilling and redeployment initiatives.

The company stated that some associates would be released due to deployment challenges. This will impact about 2% of the global workforce over the year. TCS assured that affected employees would receive benefits, outplacement services, counselling, and support during this transition.

Impact of Economic Conditions on IT Sector

The decision comes amid a challenging period for India's top IT firms, which reported single-digit revenue growth in Q1FY26. Macroeconomic instability and geopolitical tensions have affected global tech demand and delayed client decisions. TCS's revenue increased by 1.3% year-on-year to Rs 63,437 crore, with a bottom line improvement of 5.9% to Rs 12,760 crore in Q1FY26.

TCS MD and CEO K Krithivasan noted that demand contraction persists due to ongoing macroeconomic and geopolitical uncertainties. He does not anticipate double-digit revenue growth for FY26. Krithivasan highlighted intensified decision-making delays from the previous quarter but expressed hope for discretionary spending to resume as uncertainties diminish.

Global Layoffs in the Tech Industry

Microsoft has also announced significant layoffs in 2025, cutting over 15,000 jobs or 7% of its global workforce. In a memo to over 200,000 employees, Microsoft CEO Satya Nadella expressed the emotional toll of these layoffs. He remarked on the dynamic nature of progress in an industry without franchise value and saw it as an opportunity for greater impact.

According to Layoffs.fyi, a platform tracking global tech layoffs, over 80,000 tech workers have lost jobs across 169 companies in 2025 alone. In contrast, 2024 saw a staggering 1.5 lakh layoffs across 551 companies. These figures reflect global economic challenges and ongoing debates about AI's impact on job roles and employability.

The current situation underscores the need for adaptability in the tech industry amid economic fluctuations and technological advancements.

With inputs from PTI