TCS to Lay Off 12,000 Employees in Restructuring Amid AI Shift
Tata Consultancy Services (TCS), India's largest IT firm, plans to reduce its global workforce by approximately 2%, affecting around 12,000 jobs in the 2026 fiscal year. The company states the move is part of a major restructuring to become a "future-ready" organization, not a cost-cutting measure. The layoffs will primarily impact mid and senior-level employees whose roles are difficult to redeploy as TCS shifts focus towards artificial intelligence and new technologies, reflecting a significant transformation in the IT sector.
Unpacked:
Mid and senior-level employees, particularly those in roles that are difficult to redeploy—such as manual testing and legacy system management—are most at risk, as TCS focuses on newer technologies like artificial intelligence and digital transformation initiatives.
TCS is offering severance packages, extended insurance, notice period pay, and assistance with finding alternative job opportunities to support those impacted by the restructuring.
The IT sector is rapidly shifting towards artificial intelligence, automation, and digital transformation, reducing demand for traditional IT roles and requiring companies to adopt new business models and operational structures to stay competitive.
Yes, TCS has restructured before, such as in 2008 and 2022, to adapt to changing market conditions. However, workforce reductions of this scale are less common and reflect the current magnitude of technological transformation in the industry.