Tata Consultancy Services (TCS) announced plans to lay off over 12,000 employees, primarily affecting middle and senior management. This represents approximately 2% of its global workforce, which is slightly above 600,000 employees—exact workforce figures vary slightly by report (most state 600,000+, not precisely 613,069). The cuts are set to occur over the coming year, significantly impacting the Indian job market.
Why It Matters Now
K. Krithivasan, CEO and MD of TCS, attributed the layoffs to “limited deployment opportunities and skill mismatches,” not AI-driven automation. “This is not because of AI giving some 20% productivity gains. This is driven by whether there is a skill mismatch or where we think we have not been able to deploy someone,” he told Moneycontrol.
The layoffs target middle and senior-grade employees primarily. TCS has stated it aims to handle the layoffs responsibly, but details about severance or additional support measures are not publicly confirmed.
How It Solves a Key Problem
TCS and other IT companies are moving from traditional project management models to product-centric, agile approaches. These models require fewer non-technical managers and more specialized, adaptable skills, as reported by industry analysts.
“When we did programs in the old waterfall method, we had multiple leadership teams driving it. But as we move towards a more product-aligned model where we are more agile, where clients also work along with us, clients bring in their leadership team, and the pure non-technical managerial talent is required,” Krithivasan explained.
Market Impact in India
The Indian IT industry employs 5.67 million people. It generated $268.8 billion in revenue during FY2024. TCS’s decision reflects broader industry changes, posing significant implications for other players within the IT sector India.
Other major players like Infosys and Wipro are also reevaluating workforces. NASSCOM notes organizations are pivoting toward product-aligned delivery models. Client expectations around agility and innovation are rising.
Strategic Advantage for Business Leaders
AI skills now command 28% higher wages on average. That’s nearly $18,000 extra per year according to Lightcast research. The firm analyzed over 1.3 billion job postings.
Demand for AI skills in non-tech roles jumped 800% since 2022. Marketing, HR, finance, and education sectors show strong growth. Workers who combine domain expertise with AI fluency earn premium salaries, further illustrating the necessity of adaptation in this evolving landscape.
Tech job postings for AI skills are shrinking as a share of total AI jobs. In 2019, 61% of AI jobs were in IT. By 2024, this dropped to 49%. Opportunity is shifting to other industries, raising concerns for the future of traditional IT roles in the Indian IT sector.
What Business Leaders Should Know
TCS introduced new performance rules recently. Employees must maintain 225 billable days yearly. Idle time between projects cannot exceed 35 days. These changes prompted legal complaints from staff.
The Nascent Information Technology Employees Senate called the layoffs “inhumane” and “unethical.” They appealed to Labour Minister Mansukh Mandaviya for intervention.
Questions arise about CEO compensation too. Krithivasan earns around 265 million annually while thousands lose jobs.
Risks and Considerations
The Indian IT sector depends heavily on US markets. Tariff uncertainties could slow growth further. The Ministry of Electronics and Information Technology is monitoring TCS developments closely.
For Indian business leaders, this signals an urgent need for workforce planning. Companies must identify which roles AI might automate. They should invest in reskilling programs now.
The message is clear: adapt quickly or risk being left behind. Traditional IT roles are shrinking. But opportunities exist for those who blend human judgment with AI capabilities across all industries, proving vital for the sustained growth of Indian IT jobs.
