Tata Consultancy Services (TCS) is set to cut around 12,000 jobs globally, approximately 2% of its workforce, in what is being termed one of the company’s biggest-ever layoffs. However, the IT major has clarified that the decision has nothing to do with artificial intelligence replacing jobs.
In an interview with Moneycontrol, TCS CEO K Krithivasan dismissed speculation that AI-led productivity gains were behind the move, saying the cuts are due to a skill mismatch and the company’s inability to redeploy certain employees in its evolving business model.
“This is not because of AI giving some 20 per cent productivity gains. This is driven by where there is a skill mismatch or where we think we have not been able to deploy someone,” Krithivasan said.
Why the Layoffs?
The job cuts, which will take place gradually through FY26, will primarily affect mid-to-senior level employees, although some junior staff on prolonged “bench time” — those not currently deployed on any project — may also be impacted.
While TCS has invested heavily in AI upskilling and training, including training over 5.5 lakh employees in basic AI and over 1 lakh in advanced skills, the company acknowledged that reskilling hasn’t always led to re-employment, especially for senior professionals.
“Some people, especially at senior levels, find it difficult to transition to tech-heavy roles,” the CEO admitted.
Changing work model
The company is also undergoing a structural shift — moving away from the traditional “waterfall” project management method to a more agile, product-centric model. This change has reduced the need for conventional project and program managers.
“Earlier, in waterfall models, we had multiple leadership layers. That’s changing,” Krithivasan explained.
‘Difficult but necessary’
Krithivasan acknowledged the decision was difficult and unprecedented, and assured that TCS would handle the layoffs “in a very, very compassionate way.”
The company will offer severance packages, extended health insurance, mental health counselling, and outplacement support to those affected.
At the same time, TCS emphasised that it remains focused on future-readiness, and will continue to hire high-quality talent.
“This is not a question of demand. It is about us being future-ready,” Krithivasan added.
