Bengaluru: Not to pursue AI-driven efficiency, Tata Consultancy Services (TCS) is laying off 12,000 workers, or 2% of its global workforce, because the IT behemoth claims it can no longer transfer workers whose abilities no longer suit its changing business needs. K Krithivasan, the CEO, described it as a difficult but essential reckoning.
This action represents one of the biggest layoffs in the company’s history. Mid-to-senior level employees will be the most affected, but certain junior level employees—especially those who spend a lot of time on the bench—may also be touched.
“This is not because of AI giving some 20% productivity gains,” Krithivasan said, according to reports, adding that the decision has been driven by where there is a skill mismatch, or where we think that we have not been able to deploy someone.
TCS has made training investments, including upskilling more than 550,000 workers in basic AI and 100,000 in advanced AI. Retraining hasn’t, however, guaranteed placement for all. It might be difficult for senior personnel in particular to adjust to new tech positions.
The need for conventional project and program managers has also decreased as a result of the company’s transition to a more flexible, product-aligned strategy. “When we did programs in the old waterfall method, we had multiple leadership teams. That’s changing,” Krithivasan explained.
The layoffs will be implemented gradually over FY26 and are not tied to any particular geography or domain. “It is essentially skill and capability based,” he said.
Krithivasan called the decision difficult and unprecedented. “We will do it in a very, very compassionate way,” he said, outlining plans for severance benefits, extended insurance, counselling and outplacement support.
Despite the reductions, TCS remains committed to acquiring and developing talent. “We will continue to look for high-quality talent,” the CEO said. “This is not a question of demand. It is a question of we being future-ready.”
