Tata Consultancy Services (TCS), India’s largest IT company, is planning to cut around 12,000 jobs, which is about 2% of its total workforce. Most of these layoffs will affect people in middle and senior-level positions. The company says this move will happen over the next year.

Why layoffs

The reason for these job cuts is TCS's plan to become more “agile” and “future-ready.” According to CEO K Krithivasan, the IT industry is changing fast, especially with the rise of artificial intelligence (AI) and new ways of working. He said that although TCS has invested in training its employees, in some cases, it hasn’t been enough to match the company’s future needs.

Even though the CEO claims that AI isn’t the main reason behind the layoffs, experts believe that automation is quietly replacing many traditional jobs. Tasks like manual software testing are now being done by machines, and some senior employees are finding it hard to keep up with the latest tech skills.

To support the employees who will be affected, TCS plans to offer severance packages, salary for the notice period, extended health insurance, and even help in finding new job opportunities. They want to make the transition a bit easier for those being let go. The company is also updating its internal process called “bench management”, where employees who are not assigned to any project wait for a new one. Now, TCS wants to push such employees to actively seek out projects and stay engaged, rather than waiting passively.

Interestingly, during the same time, TCS also hired over 6,000 new employees in the April–June quarter of this financial year. This shows that while the company is letting go of some employees, it is also hiring new ones who have the right skills that match the company’s future needs. So, it’s not about reducing headcount completely, it’s about making sure the right people with the right skills are in the right roles.