Tata Consultancy Services (TCS), which is India’s biggest IT company, has announced that TCS Layoffs approximately 12,000 workers in FY26. The decision has shocked several figures in the technology industry, all the more so since the corporation has been routinely profitable and is positioned fairly stably in the market.

The fact that this announcement bears even greater attention is the rationale that is offered by the leaders of TCS. It was fast enough to make CEO K. Krithivasan clear that the intention of reducing the number of employees was neither out of cost-cutting motives nor due to pressure on the profitability of this organisation. Rather, the company blames the move on an increasing skill gap between the pool of workers and the needs of clients and the reason for TCS layoffs.

The Numbers Behind the News

TCS has more than 613,000 professionals around the world at present. The fact that up to 2 per cent of this workforce, which includes TCS Layoffs, mainly the middle-level and senior-level employees, will be cut is indicative of a major strategic adjustment in how the company will go about managing talent and adjusting itself to suit new demands in the industry.

It won’t be a restructuring. Instead, it belongs to a larger spreading phenomenon observed in worldwide IT organisations that have to adjust to fast technological shifts. It is not unusual, though, that such large-scale are carried out by TCS Layoffs; more so because the firm is not bankrupt.

Not About AI or Automation, Says CEO

With the increased rate of automation and implementation of AI in various industries, one is likely to reckon that people will soon be displaced by machinery. However, that is not the case, as Krithivasan speculates.

It is not due to AI providing some 20 per cent productivity increase, he asserted. This is occasioned by where there is a mismatch of skills or inappropriate deployment of a person, leading to TCS Layoffs.

In a nutshell, it is not AI stealing jobs but rather the fact that the company cannot assign current employees to new vacancies, which require different skills. The current era of digital transformation is not a cost optimisation game, but a preparation game, and a large proportion of the workforce is already behind.

It thus follows that the TCS layoffs decision is more of an observation on the changing aspects of client needs than a tendency of an organisation to lower its costs.

The Role of Bench Policies

The other major contributor towards the layoffs is the new bench policy at TCS. Employees who are not currently working on a billable project, usually known as working on the bench, are now on a tighter leash with a working limit of 35 days. In case they are not able to be redeployed within that window, they are candidates who should exit.

With this shift, there has been an element of stress, especially to the older staff who mostly need more specialised assignments as per their skills. Such customised needs cannot always be met by the internal deployment system, which results in escalated terminations.

This is the dynamic of the TCS Layoffs process that shows that not only strategic routines but also operational routines contribute to the transformation of the workforce.

A Global Industry Trend

Although the rationale of TCS is peculiar, the trend is not. However, the major corporations across the world, such as Google, Meta, Microsoft, and Amazon, have also implemented mass layoffs over the last 12-18 months. In other situations, such layoffs were explained by the decision to over-hire workers during the pandemic; in others, leaner teams were caused by automation and AI innovations.

The TCS layoffs mentioned are rare ones in the Indian IT sphere, though. TCS has had a history of stability among its employees. That makes the present round of cuts even more momentous; it flags not only a change in TCS, but possibly in the whole industry.

The decision to TCS layoffs employees might mark the commencement of the new age where old companies are desperate to downsize in the haste to remain nimble.

Impact on Employees

The majority of the affected employees are those with mid to senior positions who are professionals having years of experience and usually in specialised fields. Sadly, they are also the same professionals who might not be able to reskill / shift gears as fast.

Although TCS has been continuously investing in its internal learning and development platforms, others have not been in a position to match up with the rapidly evolving requirements within the IT ecosystem.

To the human being, what is taken is without any doubt immense. A large number of these employees have been in the company during the past decade or so. It is hard to swallow when one is told that he or she is being sent away because their skills are not relevant anymore.

Nonetheless, the direction of the company appears evident enough: it is not only experience, but flexibility that will help it rise in the future.

What This Means for the Future

The announcement of the TCS laying off is likely to serve as a wake-up call, and this is not only to the employees of the TCS but also to the Indian IT workforce as a whole. Professionals will be forced to retrain constantly and reorient time and again as more services are automated, artificial intelligence, and digitalised, taking different shapes.

The areas with the greatest demand are cloud computing, cybersecurity, AI development, and data analytics. Any employee able to reposition himself/herself with these points will be in a better place not only in TCS but also in the industry.

Simultaneously, the restructuring efforts demand that the companies adopt a moderate course of action, providing sufficient support, resolute reskilling opportunities, and regular communication with the employees.

Conclusion

The news that TCS layoffs 12,000 employees is not merely an extra addition to the list of headlines characterising numerous technology layoffs. This is an indication to show just how fast the industry is evolving, and that even once stable companies must change, or they will become obsolete.

It is a strategic repositioning more than a financial one, and a move that highlights the importance of being flexible, cross-training and futuristic in the current IT environment.

Until then, the idea of TCS Layoffs  workers is a strong message that being relevant in technology is not a mere possibility anymore; it is a necessity.

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