BENGALURU, July 27, 2025 — Tata Consultancy Services (TCS), India’s flagship IT services firm, announced plans to reduce its global workforce by about 2% in the 2026 fiscal year (April 2025–March 2026). The reduction, expected to affect roughly 12,000 to 12,260 employees, is part of a strategic realignment under its internal initiative Project Fluidity, aimed at making the organisation more agile and AI‑enabled
Why the Move?
- Technological evolution, especially rapid adoption of AI and GenAI tools, is reshaping service delivery, reducing reliance on traditional labour‑intensive models .
- Skill gaps and evolving project demands have made some roles steady yet non‑deployable and non‑scalable in a shifting business environment.
- Softening demand and clients holding back on non‑critical tech spend, compounded by macroeconomic uncertainty and US trade policy concerns, are putting pressure on margins and headcount models.
Who Will Be Impacted?
Employees at middle and senior management levels will bear the brunt of the reductions. TCS confirmed this would impact approximately 12,000–12,200 heads out of its global workforce of around 613,000 as of June 30, 2025.
Support Measures
TCS has emphasised its intention to execute the transition with care. Affected personnel will receive notice-period pay, severance packages, extended insurance coverage, and access to outplacement support. Redeployment and reskilling efforts have been underway, though some roles have not proved viable for redeployment .
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Context and Employee Backlash
Earlier in July, employees and candidate groups raised concerns over TCS’s benching policy, which restricts unallocated bench days to 35 per annum and mandates at least 225 billable days. Many who accepted lateral offers—or were benched—faced delayed onboarding or non-deployment, prompting complaints filed with the labour ministry by the Nascent Information Technology Employees Senate (NITES).
Industry Implications
TCS’s move underlines broader shifts in India’s $283 billion IT services sector, where AI and automation are prompting providers to reinvent workforce structures. According to industry analysts like Phil Fersht of HFS Research, global firms now face mounting pressure to cut costs by 20–30% and stay competitive on price while maintaining margins—making leaner, tech-enabled teams the new norm.
At a Glance
| Item | Details |
|---|---|
| Workforce reduction | ~2% globally |
| Approx. number of roles impacted | 12,000–12,260 |
| Timeline | FY 2026 (Apr 2025–Mar 2026) |
| Levels Mostly Affected | Middle and Senior Management |
| Key Drivers | AI adoption, skill mismatch, market slow‑down |
| Employee Support | Severance, benefits, outplacement |
| Related Concerns | Benching policy, delayed lateral onboarding |
TCS’s decision marks its first major global layoff, a departure from its longstanding reputation for job stability. The change underscores how even established giants now grapple with disruption at both organisational and industry levels.
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