Tata Consultancy Services (TCS) is planning to lay off around 12,000 employees, which is about 2% of its global workforce. Interestingly, this decision is not because of artificial intelligence (AI).
The main reason is that the company has limited roles for some employees and is facing a mismatch in employee skills.
TCS CEO and MD K Krithivasan shared this in an interview with Moneycontrol. TCS is India’s largest IT firm, employing over 6 lakh people globally.
AI Has Boosted Productivity, But That’s Not the Reason
TCS CEO Krithivasan clarified that the layoffs are not happening because AI has increased productivity by 20%.
He said, “That’s not why we’re doing it. The layoffs are due to skill mismatch and because we couldn’t assign certain employees to projects.”
He also added that the company still needs skilled people and will continue hiring and training new talent.
Middle and Senior-Level Employees Most Affected
The job cuts will mainly affect middle and senior-level staff. However, some entry-level employees who have been on the “bench” (not assigned to projects) for a long time could also be impacted.
Large-Scale Employee Training Already Done
Krithivasan mentioned that TCS has already trained a huge number of employees. About 5.5 lakh people have received basic skill training, and 1 lakh have been trained in advanced skills.
However, he pointed out a key problem—after training, the company has not always been able to place employees in suitable projects.
Senior-level employees especially cannot work with just entry-level skills, which limits their usability in certain roles.
Laid-Off Employees to Get Severance Package
TCS will pay salaries to the laid-off employees during the notice period. In addition, a severance package will be provided.
This is a form of compensation given when a company lets go of employees. TCS will also try to give insurance benefits and help with job placement. The layoff process is expected to be completed over the next three quarters of FY26.
TCS Stock Down 29% in One Year
On July 28, TCS shares saw a drop of 1.31% in early trading, falling to ₹3,094. The company’s stock performance has been weak over the past year, with a decline of more than 29%.
TCS is a part of the Tata Group and is the largest group company in terms of market capitalization.
