India’s largest IT services company, Tata Consultancy Services (TCS), is preparing for a major workforce reduction. Over the next year, the company will cut 2% of its headcount—impacting more than 12,000 employees, primarily at the middle and senior management levels. The announcement was made by CEO K Krithivasan in an interview with Moneycontrol.
AI and Automation: The Silent Catalysts?
While Krithivasan avoided directly blaming artificial intelligence for the layoffs, he acknowledged that AI and evolving operating models are pushing the company to reassess its staffing needs. “It’s not because we need fewer people,” he said, “but because we must deploy the right people with future-ready skills.”
Despite this diplomatic stance, industry experts believe automation and AI are quietly disrupting traditional IT roles—particularly in areas like manual testing and project management—where many senior professionals have struggled to keep up with rapid tech changes.
Severance, Support, and Shifting Bench Culture
TCS confirmed it will offer severance packages, salary for the notice period, extended health benefits, and outplacement assistance for affected employees. The company is also revamping its bench management strategy to ensure unassigned employees seek active project roles and stay productive.
Krithivasan noted that the move isn’t about cost-cutting or efficiency but about creating “positive pressure” to keep staff aligned with business goals.
Growth Amid Restructuring
Interestingly, TCS added 6,071 new employees during Q1 FY25, with a net workforce growth of 5,090. This signals a shift in hiring strategy—moving away from headcount expansion toward targeted hiring aligned with evolving tech requirements.
As AI continues to redefine enterprise operations, TCS’s actions reflect a broader trend across global IT giants: adapt or fall behind. The company’s new approach emphasizes skill adaptability over seniority, aiming to build a leaner, smarter, and more agile workforce for the AI-driven era.
