TCS to lay off 12,261 employees in strategic workforce reshaping; artificial intelligence to blame?
PTC Web Desk: Tata Consultancy Services (TCS), India’s largest IT services firm, has announced plans to lay off around 12,261 employees, amounting to 2% of its global workforce, over the course of the fiscal year 2026. The decision comes as part of the company’s strategic workforce restructuring, aimed at aligning its resources with current industry needs.
In an interview with MoneyControl, TCS CEO K Krithivasan described the move as a “hard but necessary reckoning,” clarifying that these layoffs are not driven by artificial intelligence (AI). He stressed that the layoffs were based on skill mismatches or instances where the company was unable to effectively deploy employees. “This is not because of AI giving some 20 percent productivity gains,” Krithivasan explained.
The decision primarily affects senior and middle-level employees, and TCS has stated that it will be implementing these layoffs gradually throughout FY26. The company assured that the process would be carried out “in a very, very compassionate way,” aiming for minimal disruption to affected employees.
TCS’s official statement, however, hinted at AI’s indirect role in the company’s decision, mentioning the firm’s ongoing journey to become a "Future-Ready" organisation. The company is investing in emerging technologies, expanding into new markets, and deploying AI solutions both for clients and internally. As part of this transformation, TCS has introduced reskilling and redeployment initiatives, but some positions have become redundant. “We will also be releasing associates from the organisation whose deployment may not be feasible,” the statement noted.
The layoffs come 30 months after the debut of ChatGPT, a generative AI tool that raised questions about the future of traditional IT services models. This shift is becoming increasingly evident across India’s IT sector, with other major companies like HCL Technologies also considering workforce reductions due to automation's impact on the job market.
- With inputs from agencies
