In a major development signaling a broader transformation in India’s IT sector, Tata Consultancy Services (TCS) — the country’s largest IT services company — announced on Sunday that it would be reducing its workforce by approximately 2%, which translates to around 12,200 jobs, in the financial year 2026.
The decision will primarily affect middle and senior-level employees, a significant move for a firm known for its historically stable employment practices.
The company stated that the workforce rationalization is part of its strategic pivot towards a business model powered by artificial intelligence (AI) and automation, aligning with the changing nature of global client demands and a challenging macroeconomic environment.
This shift, according to the official statement cited by Reuters, is aimed at maintaining service excellence without compromising delivery.
“This transition is being planned with due care to ensure there is no impact on service delivery to our clients,” TCS said in its statement.
TCS, which employs over 613,000 professionals globally, has long maintained a reputation for being a secure workplace in the Indian IT ecosystem.
However, the decision to initiate job cuts is now being seen as a harbinger of more sweeping sectoral changes, as automation, generative AI, and digital transformation reshape traditional service delivery models.
AI Disruption and Market Realignment
Industry experts view TCS’s decision as reflective of a broader realignment in the $283 billion Indian IT industry, where client budgets are shrinking and demands for greater operational efficiency are intensifying.
Phil Fersht, CEO of global IT advisory firm HFS Research, remarked that tech service providers like TCS are now “rebalancing their workforce” in a bid to safeguard profit margins, especially as clients push for 20–30% cost reductions.
“TCS taking such a step, given its culture of job stability, underscores the intensity of disruption sweeping through the IT sector,” Fersht noted.
TCS CEO K. Krithivasan had earlier highlighted the company’s cautious business outlook, pointing to delays in client decision-making, slow project rollouts, and a broader uncertainty in tech investments as key reasons for adopting a more conservative strategy.
Online Reaction: Anxiety Over Job Security
The announcement has triggered widespread concern on social media platforms, with many industry professionals and observers voicing alarm over what the move signals for the wider IT industry.
“If even TCS is laying off, what will happen at smaller firms? This looks terrifying,” posted one user on X (formerly Twitter).
Another user wrote: “The AI threat is no longer futuristic. It’s already reshaping our jobs today.”