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TCS CEO and MD K Krithivasan explained that the layoffs are being driven by skill mismatches and limited deployment opportunities
TCS Layoffs
TCS Layoffs: Tata Consultancy Services (TCS) plans to reduce its global workforce by 2 percent, affecting approximately 12,000 employees. However, the move is not linked to efficiency gains from artificial intelligence (AI), according to the company’s top leadership.
TCS CEO and MD K Krithivasan told Moneycontrol that the layoffs are being driven by skill mismatches and limited deployment opportunities, rather than automation.
“No, this is not because of AI giving some 20 percent productivity gains. We are not doing that,” Krithivasan said. “This is driven by where there is a skill mismatch, or, where we think that we have not been able to deploy someone.”
He further added that the company continues to pursue high-quality talent and invest in upskilling. “It is not because we need less people. We will continue to look for high (quality) talent, acquiring talent, training talent. That continues to happen. This is more about where there is a feasibility of deployment,” Krithivasan explained.
The layoffs are expected to affect mostly middle and senior-level employees, along with some entry-level associates who have remained on the bench for extended periods. TCS had previously announced significant skilling efforts, training over 550,000 employees in foundational skills and 100,000 in advanced skills.
However, Krithivasan noted that deploying trained talent at more senior levels remains a challenge. “Some of them could be trained, but maybe we are not able to train beyond level 1 and level 2 skills, because when the person is very senior, they may not be able to use the entry-level skills,” he told the news outlet.
To support affected employees, TCS will offer a severance package that includes notice period pay, extended insurance benefits, and outplacement assistance.
“We will be first talking to the people that could be impacted. We will provide them an opportunity,” said Krithivasan. “When we are not able to provide the opportunity, then we need to do the step we need. We will provide appropriate benefits.”
TCS’s HR policy will guide the layoff process. “The HR has a good policy on how we will do it. They will follow the policy,” the CEO told Moneycontrol. “We are looking at outplacement services where we are employing agencies. We’ll also provide them support on outplacement and any counselling required. We’ll take care of it. We will do it in a very, very compassionate way.”
The layoffs are expected to roll out gradually over the next three quarters of FY26 and will not be confined to any particular geography or domain.
The announcement comes shortly after TCS updated its internal HR policy, mandating 225 days of billability per year and capping bench time at 35 days — a signal of the company’s shift toward tightening workforce utilisation.
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a…Read More
Aparna Deb is a Subeditor and writes for the business vertical of News18.com. She has a nose for news that matters. She is inquisitive and curious about things. Among other things, financial markets, economy, a… Read More
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