Tata Consultancy Services is laying off 12,260 employees, marking a major shift in its AI workforce transformation journey. Furthermore, this change affects nearly 2% of its 6.13 lakh+ global employees.
TCS claims that the decision furthers the company’s goal of becoming flexible and ready to grow as customer demands evolve. Additionally, the organization will provide support packages that include insurance extension, transition assistance, and severance pay.
Inside TCS Restructuring Amid AI Workforce Transformation
The decision is a part of a long-term strategy to prioritize digital communication. It is adopting AI workforce transformation for delivery models and business operations. TCS claims it will restructure roles and get rid of those that automation has made useless. Furthermore, the action is compatible with a growing trend in the industry, which holds that restructuring employees is becoming crucial to preserving profit margins.
Experts say that because of automation and AI developments, the IT industry is becoming less reliant on human-led delivery. Industry expert Phil Fersht clarified that clients are now demanding 20–30% service price reductions, forcing big companies like TCS to reduce expenses. Furthermore, the organization has postponed the onboarding of 600 lateral hires, which raises concerns about decreased opportunities in IT positions.
Meanwhile, there is a larger trend behind the tech layoffs. In Q1 of FY26, only 3,847 new employees were hired by the top six IT companies in India. Thus, this represents a significant decrease from the 13,935 hires made in the prior quarter. Additionally, TCS’s action is viewed as both strategic and essential to conform to global realities.
Is TCS Ready for a Post-AI Workforce?
TCS intends to increase its investment in AI-based services, infrastructure improvements, and workforce reallocation in the future. The business is starting initiatives to upskill its remaining workforce in cutting-edge technologies. As part of this employee restructuring, TCS also wants to minimize disruptions to client delivery while preparing teams for future roles.
TCS responded to criticism by restating its dedication to moral offboarding procedures. Affected employees will also receive career transition assistance, counseling, and financial support. However, reports suggest that affected employees are becoming more anxious, owing to evolving policies such as capped bench time. Furthermore, a few employees have even filed lawsuits against the updated deployment standards.
How AI Workforce Transformation Redefines India’s IT Future
TCS’s AI workforce transformation represents a significant change for Indian IT. As AI disrupts traditional service models, older businesses must adapt or risk falling behind. TCS’s reorganization plan might serve as a model for other significant industry participants. Additionally, the business promises to assist those affected. However, it’s crucial to consider the emotional and financial costs. During this revolution, it is unclear how companies will balance innovation and accountability.
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