Mumbai — In a strategic move to realign operations and focus on next-generation technologies like artificial intelligence, India’s largest IT services company, Tata Consultancy Services (TCS), has announced it will cut 2% of its workforce by FY2026. The reduction will impact approximately 12,200 employees, primarily in middle and senior management roles.
Shift Toward AI and Operational Efficiency
In a statement released on Sunday, TCS emphasized that the workforce restructuring is part of its broader transformation strategy, which includes entering new global markets, adopting advanced technologies, and deploying AI-driven solutions.
“This transition is being planned with due care to ensure there is no impact on service delivery to our clients,” the company stated.
While the tech giant is retraining and redeploying staff across verticals, the company clarified that some roles—especially those redundant due to automation and AI adoption—will be phased out.
Indian IT Sector Under Pressure
India’s $283 billion IT industry has been facing headwinds due to delayed client decision-making, sluggish demand, and global macroeconomic uncertainty. Persistent inflation and unclear U.S. trade policies have further affected global IT spending.
TCS CEO K Krithivasan recently acknowledged the challenges, saying,
“There are delays in client decision-making and project starts, which are impacting near-term growth.”
What This Means for the IT Industry
The move from TCS may signal a broader trend in the Indian IT sector as companies adapt to AI integration, cost optimization, and changing client expectations. Experts believe that while short-term layoffs may hurt morale, long-term gains in efficiency and competitiveness could follow.
