Home » India’s Tech Giant TCS to Cut 2% of Workforce in Restructuring Drive

India’s Tech Giant TCS to Cut 2% of Workforce in Restructuring Drive

by Assam Talks
0 comments

Mumbai, July 27, 2025 – In a significant restructuring move, Tata Consultancy Services (TCS), India’s largest IT services provider, announced plans to reduce its global workforce by approximately 2% in its 2026 financial year (April 2025 – March 2026). The planned layoffs, affecting around 12,200 employees, will target middle and senior management roles as the company adapts to evolving market demands and positions itself for a technology-driven future.

Strategic Restructuring Amid Global Slowdown

In a statement released on Sunday, TCS outlined that the reduction is part of a broader strategy to enhance agility, invest in new technology, and harness artificial intelligence (AI) capabilities. CEO K Krithivasan emphasized that while AI adoption is a notable factor in the decision-making process, the primary objective is to align the company’s skills with future industry demands. “This transition is being planned with due care to ensure there is no impact on service delivery to our clients,” the company stressed.

The restructuring comes in the wake of persistent challenges within India’s IT sector, which, despite a robust market capitalization of $283 billion, has seen clients curtailing non-essential technology spending. Contributing factors include weak demand, enduring inflation, and uncertainty linked to US trade policies. Earlier this month, CEO Krithivasan noted delays in client decision-making and project initiations, further underscoring the need for TCS to realign its operational model.

Employee Support and Future Outlook

To mitigate the impact on its workforce, TCS is undertaking efforts to retrain and redeploy affected employees. Affected staff members are expected to receive comprehensive severance packages, outplacement services, and extended benefits to support their transition. This initiative is part of the company’s dual focus on managing current economic pressures while preparing for future market opportunities.

Industry experts view TCS’s decision as a proactive step towards maintaining competitiveness in a rapidly changing global tech environment. By investing in emerging markets and integrating advanced technological tools, TCS aims to not only streamline operations but also to position itself as a leader in innovative IT solutions.

Market Reaction and Industry Implications

While the layoffs will naturally raise concerns regarding job security among mid-level and senior executives, market analysts suggest that TCS’s move reflects a necessary realignment in a sector facing both internal and external pressures. As global tech spending continues to fluctuate, companies are increasingly adopting similar strategies to remain resilient amid economic uncertainties and shifting technological landscapes.

As TCS moves forward with its restructuring, the industry will be watching closely to assess whether this strategic pivot can effectively balance cost-cutting measures with long-term innovation and growth.

This move by TCS marks a critical juncture for the company as it navigates global economic headwinds while positioning itself for a future dominated by digital transformation and artificial intelligence.

You may also like

Leave a Comment