Tata Consultancy Services (TCS) is laying off approximately 12,000 employees, accounting for about 2% of its global workforce of 613,069. This move is the largest-ever layoff in India's IT sector. The decision comes amid growing macroeconomic uncertainty and increasing AI-led disruptions impacting technology demand.
TCS CEO K Krithivasan attributes the decision to skill mismatches and the company's inability to redeploy certain employees, rather than efficiency improvements from AI implementation. The layoffs will primarily impact mid-level and senior executives.
The company has assured comprehensive support for the affected employees, including outplacement services, counselling assistance, severance packages, notice period compensation, insurance coverage, and career transition support.
The layoffs reflect a strategic shift towards embracing AI and automation in the IT industry. Other Tata Group entities, such as Tata Steel and Tata Motors, have also been cutting jobs to lower costs and enhance profitability. Industry observers see this as an early sign of a broader shift in the IT sector, where companies are reducing employee costs due to margin pressures and increased automation.
The move highlights the challenges faced by the IT industry in adapting to changing market conditions and technological advancements. As the industry continues to evolve, companies like TCS are likely to prioritize skill development and strategic workforce planning to stay competitive.
