Tata Consultancy Services (TCS) plans to let go around 2% of its global workforce, which translates to over 12,000 employees, by 2026. This is part of a restructuring exercise to make the company more agile and technology aligned.
What did TCS management say on layoffs
The move will impact employees across geographies and verticals and is being positioned as a strategic shift rather than a cost cutting exercise. TCS CEO K Krithivasan told Moneycontrol that the company has been adapting to changes in technologies and operating models. “We have been calling out new technologies, particularly AI and operating model changes. The ways of working are changing. We need to be future ready and agile,” he said.
Krithivasan said TCS has invested heavily in upskilling employees and offering them internal career opportunities but not all roles could be redeployed effectively. “Still we find that there are roles where redeployment has not been effective. This will impact roughly 2% of our global workforce, primarily at middle and senior levels. It has not been an easy decision and one of the toughest decisions I have had to take as CEO,” he added.
Transition Support for Impacted Staff
TCS which has a headcount of 6,13,000 as of June 2024 will make the layoffs as humane as possible. Affected employees will get notice period pay, severance packages, extended insurance coverage and outplacement services. “It’s a difficult call we have to take to build a stronger TCS,” Krithivasan said.
When asked if the move was driven by AI led productivity gains or macroeconomic and demand related factors, Krithivasan replied, “This is not because of AI but to address skills for the future. This is about feasibility in deployment not because we need less people,” he clarified.