TCS Job Cuts: Is Artificial Intelligence the Reason Behind 12,000 Layoffs? CEO K Krithivasan Responds
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Tata Consultancy Services (TCS), India’s largest IT services company, is set to reduce its global workforce by around 2%, which translates to approximately 12,000 employees. However, the company has clarified that this decision is not a result of automation or artificial intelligence (AI) replacing jobs.
Speaking to Moneycontrol, TCS CEO and MD K Krithivasan addressed the growing speculation around AI-driven job cuts. “No, this is not because of AI giving some 20 percent productivity gains. We are not doing that," Krithivasan said. “This is driven by where there is a skill mismatch, or, where we think that we have not been able to deploy someone."
The company emphasized that the move is primarily about aligning talent with business requirements. Many of the employees affected are those who have remained on the bench for extended periods, particularly at the mid and senior levels. Some entry-level associates who haven’t found suitable deployment opportunities are also likely to be impacted.
Krithivasan stressed that TCS is still committed to acquiring and training top-tier talent. “It is not because we need less people. We will continue to look for high (quality) talent, acquiring talent, training talent. That continues to happen. This is more about where there is a feasibility of deployment," he explained.
TCS has made considerable investments in employee upskilling over the years, having trained over 550,000 employees in foundational digital skills and more than 100,000 in advanced skills. However, re-deploying senior talent remains a challenge.
“Some of them could be trained, but maybe we are not able to train beyond level 1 and level 2 skills, because when the person is very senior, they may not be able to use the entry-level skills," Krithivasan noted.
To support impacted employees, TCS will offer severance packages that include notice period pay, extended health insurance, and help with outplacement. “We will be first talking to the people that could be impacted. We will provide them an opportunity," said Krithivasan. “When we are not able to provide the opportunity, then we need to do the step we need. We will provide appropriate benefits."
The company also assured that the layoffs will be handled with sensitivity, in accordance with internal HR policies. “The HR has a good policy on how we will do it. They will follow the policy," the CEO told Moneycontrol. “We are looking at outplacement services where we are employing agencies. We’ll also provide them support on outplacement and any counselling required. We’ll take care of it. We will do it in a very, very compassionate way."
The layoffs are expected to roll out gradually over the next three quarters of FY26. They will not be limited to any specific geography or domain but will depend on individual deployment feasibility.
This development comes on the heels of a major update to TCS’s internal workforce policy, which now requires employees to be billable for at least 225 days per year and limits bench time to 35 days. The shift underscores TCS’s renewed focus on optimizing workforce utilization while continuing to invest in long-term talent development.
Speaking to Moneycontrol, TCS CEO and MD K Krithivasan addressed the growing speculation around AI-driven job cuts. “No, this is not because of AI giving some 20 percent productivity gains. We are not doing that," Krithivasan said. “This is driven by where there is a skill mismatch, or, where we think that we have not been able to deploy someone."
The company emphasized that the move is primarily about aligning talent with business requirements. Many of the employees affected are those who have remained on the bench for extended periods, particularly at the mid and senior levels. Some entry-level associates who haven’t found suitable deployment opportunities are also likely to be impacted.
Krithivasan stressed that TCS is still committed to acquiring and training top-tier talent. “It is not because we need less people. We will continue to look for high (quality) talent, acquiring talent, training talent. That continues to happen. This is more about where there is a feasibility of deployment," he explained.
TCS has made considerable investments in employee upskilling over the years, having trained over 550,000 employees in foundational digital skills and more than 100,000 in advanced skills. However, re-deploying senior talent remains a challenge.
“Some of them could be trained, but maybe we are not able to train beyond level 1 and level 2 skills, because when the person is very senior, they may not be able to use the entry-level skills," Krithivasan noted.
To support impacted employees, TCS will offer severance packages that include notice period pay, extended health insurance, and help with outplacement. “We will be first talking to the people that could be impacted. We will provide them an opportunity," said Krithivasan. “When we are not able to provide the opportunity, then we need to do the step we need. We will provide appropriate benefits."
The company also assured that the layoffs will be handled with sensitivity, in accordance with internal HR policies. “The HR has a good policy on how we will do it. They will follow the policy," the CEO told Moneycontrol. “We are looking at outplacement services where we are employing agencies. We’ll also provide them support on outplacement and any counselling required. We’ll take care of it. We will do it in a very, very compassionate way."
The layoffs are expected to roll out gradually over the next three quarters of FY26. They will not be limited to any specific geography or domain but will depend on individual deployment feasibility.
This development comes on the heels of a major update to TCS’s internal workforce policy, which now requires employees to be billable for at least 225 days per year and limits bench time to 35 days. The shift underscores TCS’s renewed focus on optimizing workforce utilization while continuing to invest in long-term talent development.
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