TCS Layoff: What The Company is Providing to 12,000 Impacted Employees
Tata Consultancy Services (TCS), India's biggest IT services company, declared that it will downsize its workforce by around 2%, impacting more than 12,000 staff members, mostly at the level of middle and senior management, within the fiscal year 2026 (April 2025 to 2026). The move, aimed at being able to keep up with shifting trends in technology and to keep pace with prospective skill requirements, has created considerable media attention. Supporting the laid-off staff members, TCS has specified an overall compensation and aid plan to allow for a decent and orderly transition. The article relates to details provided by the company for the staff members who will be impacted and background to why such layoffs are being made.
Background on the TCS Layoffs
As of June 2025, TCS employed 613,069 personnel around the globe. Reducing up to around 12,200 positions as part of a reorganization to make the company agile and “future-ready” with rapidly transforming technology, particularly artificial intelligence (AI) and new business models, is part of CEO K Krithivasan’s step that is not directly aimed at AI but to address mismatches of skills and redeployment challenges. The reductions will primarily be carried out within middle and senior-grade officials of various areas and geographies that are being operated by TCS, with gradual development of this process until FY26.
Compensation and Support to Affected Employees
TCS has pledged to offer a comprehensive support package to make sure that the transition of affected staff is carried out with care and dignity. The company’s initiatives are as follows:
Severance Pay: TCS will provide severance packages tailored to its HR policies, ensuring financial support for outgoing employees. While specific amounts have not been disclosed, the packages are described as “enhanced severance benefits” to help employees during the transition period.
Notice Pay: Impacted staff members will be paid salaries for the notice period, offering further economic security as new career options are explored.
Extended Health Insurance: TCS provides extended insurance coverage to ensure that all employees and their families continue to have access to healthcare benefits after leaving employment.
Outplacement Services: The company will provide outplacement assistance, including job placement support to help employees find new opportunities. This may involve partnerships with recruitment agencies or access to job boards and career transition programs.
Career Transition Assistance and Counseling: TCS has made a commitment to extend career transition assistance and counseling to help workers as they face the job market, revise resumes, and prepare for interviews. The aid is designed to relieve the emotional and vocational pangs of layoffs.
Redeployment Opportunities: Before resorting to layoffs, TCS will attempt to redeploy affected employees within the organization. CEO K Krithivasan emphasized that the company will identify impacted employees carefully and provide opportunities for reassignment where feasible
Context and Industry Implications
Layoffs are at a juncture when TCS is dealing with macro unpredictabilities as well as AI-led disruptions that are redefining the IT sector. The company has imposed tighter policies, including asking for at least 225 billable days per year and a maximum 35-day bench time, indicative of an effort to make its workforce more efficient. The move has raised issues with employees, with a few claiming to be subjected to force resignations and others raising legal challenges to the new bench policy.Commentators further state that this step could set up a precedent within the broader Indian IT sector with other smaller enterprises potentially following suit. The dismissal is also at a juncture when TCS has reported a 5.98% year-on-year profit growth to Rs 12,760 crore for Q1 FY26 despite a 1.61% sequential decline in revenue and a spike up in attrition rates to 13.8%. Such data speaks to complex trade-offs between profitability, human resource management, as well as technological transformation.
X posts are a reflection of public sentiment, with some users expressing worry with regards to the impact upon mid- and senior-grade professionals who have been with an organisation for decades. Other users are viewing this as part of broader shifts underway within the IT sector as a consequence of AI and calling upon businesses to concentrate upon reskilling and redeployment of terminated staff.
TCS’s move to fire around 12,000 staff members is indicative of the difficulties of being competitive while operating within a fast-changing technology sector. Providing severance pay, notice period pay, extended health insurance, outplacement, career transition, and redeployment were all offered by TCS to cushion the effect on its staff members. The firings, however, have raised debate regarding the future of occupations within the IT sector as well as reskilling to correct mismatches between skills and demand. The way TCS undergoes this transformation will inform perceptions regarding its dedication to staff welfare as well as serve as a model for the sector.
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