TCS Plans Job Cuts of Over 12,000 Workers in Big Company Change

  Photo:Reuters

The recent announcement by Tata Consultancy Services (TCS), India's largest IT services company, to reduce its workforce by over 12,000 employees has sent ripples through the Indian and global tech industry. This strategic move, representing about 2% of TCS’s total workforce, marks one of the most significant layoffs in a sector that once prided itself on stability and steady growth.

The Context of the Layoffs

TCS employs over 600,000 people worldwide, and its decisions often create ripple effects for millions of individuals indirectly connected to the economy through the IT sector. The job cuts primarily target mid-level and senior employees and are part of a broader effort by the company to become "future-ready," align with evolving market needs, and improve operational efficiency. This strategy reflects a global trend, where technology and software companies are recalibrating their workforce in response to changing demands and technological shifts.

The company’s leadership states that these layoffs result mainly from skill mismatches. As the world embraces new ways of working, many of the existing skill sets within the company are being reassessed. Employees whose roles no longer fit the company’s strategic direction are being let go after various reskilling and redeployment attempts.

The Larger Industry Shift

This announcement is not an isolated event but rather a visible indicator of a massive transformation underway in the IT sector. Driven by technological advancements and changing client expectations, companies worldwide are adopting new tools and processes that demand higher and different skills from their workforce. The Indian IT services sector, which forms a crucial part of the country's economic fabric contributing more than 7% to India’s GDP and employing around 5.67 million people as of early 2025, is feeling the impact.

The integration of new technologies means many routine jobs — like basic programming, manual testing, and customer service roles — are changing. As a result, job roles are evolving, and workforce demands are shifting towards more specialized, tech-savvy skills. This shift leaves behind many employees whose existing skill sets are no longer aligned with contemporary business needs.

Employee Impact and Company Support Measures

The layoffs naturally cause anxiety and uncertainty among employees and the wider community. TCS has assured affected employees of support through various measures, including full payment during notice periods, enhanced severance packages, extended health benefits, outplacement assistance, and counseling services to help smoothen their transition to new opportunities.

Nonetheless, this move has raised serious debates on employment security, corporate responsibility, and the human costs of technological progress. The Tata group’s size and reputation have historically positioned TCS as a stable employer akin to public sector jobs in India. Thus, these layoffs have been a shock, sparking discussions on the ethics and transparency of large-scale workforce reductions.

Reactions and Industry Discussions

Within India’s broader IT ecosystem, TCS’s announcement has triggered a wave of reactions—from employees, unions, experts, and policymakers. The Ministry of Information Technology has reportedly been closely monitoring the layoffs, underlining the social and economic significance of such a large workforce reduction.

Employee unions have criticized the move, highlighting potential violations of labor laws and raising concerns over the psychological and financial hardship faced by thousands of service professionals, many of whom carry family responsibilities and significant financial commitments.

Social media platforms have become venues for affected workers and observers to express their concerns, share stories, and speculate about the future trajectory of jobs in the IT sector. Discussions frequently raise the challenges faced by older employees, the urgency of upskilling, and the prospects for re-employment in a rapidly changing market.

Broader Economic Implications

Beyond the immediate impact on employees, TCS’s layoffs reflect broader economic shifts. The Indian IT sector has been one of the country's biggest success stories, creating a middle-class workforce and contributing significantly to exports and economic growth. Changes in this sector echo throughout the wider economy in areas like real estate, education, transportation, and retail.

A reduced workforce in TCS and similar companies means less income for thousands of families, potentially impacting consumer spending and economic activity. At the same time, companies must evolve to stay competitive globally amid technological disruption, geopolitical uncertainties, and market slowdowns worldwide.

Leadership and Executive Accountability

The CEO and senior management have emphasized that the workforce reshaping is necessary to maintain TCS’s competitive edge. Yet, the juxtaposition of executive salaries and large-scale layoffs has sparked debate on corporate governance and fairness, compelling industry leaders to reflect on balancing growth, innovation, and social responsibility.