Tata Consultancy Services (TCS), India’s largest IT services company, is planning to reduce its workforce by 2% in the 2026 financial year, primarily impacting middle and senior management roles, according to the news report by Reuters.
The reduction will result in the loss of approximately 12,200 jobs from TCS’s total staff of over 613,000. This move comes as the company increasingly adopts AI and other technologies, expands into new markets, and navigates an uncertain demand environment.
TCS emphasized in its statement that the transition is being managed carefully to ensure uninterrupted service delivery to clients.
India’s $283 billion IT industry has been facing headwinds, with clients delaying non-essential tech spending due to soft demand, persistent inflation, and ongoing uncertainty surrounding U.S. trade policies.
TCS CEO K. Krithivasan noted earlier this month that clients are taking longer to make decisions and initiate new projects.
Phil Fersht, CEO of IT advisory firm HFS Research, explained that AI is beginning to disrupt the traditional, labor-intensive services model in the industry.
This shift, Fersht said, is compelling large firms like TCS to restructure their workforces in order to protect profit margins and remain competitive in a market where clients are pushing for 20–30% cost reductions.
Fersht added that TCS’s decision, given its reputation as a stable employer, underscores a broader trend across the IT sector.
