Tata Consultancy Services (TCS), India’s largest IT services firm, has announced that it will reduce its global workforce by 2%—approximately 12,200 employees—in the financial year FY26 (April 2025 to March 2026).

The layoffs, which will primarily affect middle and senior management roles, come as part of the company’s strategy to align with changing technology demands and make the organization future-ready.

CEO Calls It a Tough but Necessary Step

TCS CEO K. Krithivasan described the move as “one of the toughest decisions” he has had to make. He explained, “The ways of working are changing. We need to be future-ready and agile.” The company is increasingly deploying artificial intelligence (AI) at scale and reassessing the skill sets required for the future.

AI Adoption and Workforce Upskilling

The announcement coincides with TCS’s large-scale AI deployment and continued investment in advanced technologies. Over 1.14 lakh employees have already been trained in AI skills, with 15 million hours dedicated to learning emerging technologies during the April–June quarter.

Financial Performance Remains Strong

Despite the restructuring, TCS posted robust Q1 FY26 results:

• Net profit: ₹12,760 crore (up 6% year-on-year)
• Revenue from operations: ₹63,437 crore (up 1.3%)
• Interim dividend: ₹11 per share

Krithivasan noted that strong deal wins and demand for new-age services helped maintain steady performance amid a challenging global economic and geopolitical climate.

Focus on Future Growth

The CEO reiterated TCS’s commitment to building a future-ready workforce, investing heavily in the AI ecosystem, including infrastructure, data platforms, and business applications, while continuing to expand into new global markets.

This strategic shift underscores TCS’s vision to remain competitive in a rapidly evolving IT landscape.