India’s largest IT firm plans biggest layoff in history, citing tech shift

Mumbai, July 28, 2025 ChatGPT said:

Tata Consultancy Services (TCS) is preparing to lay off 12,000 employees. This accounts for about 1.1% of its total workforce. It marks the IT giant’s biggest workforce reduction ever. The company cites AI-led disruptions, macroeconomic uncertainty, and rising operational costs as the key drivers behind the move. The layoffs are expected to primarily affect mid-level professionals and non-client-facing managers.

TCS CEO N. Chandrasekaran explained that the workforce realignment is necessary to remain competitive and agile in an evolving technological landscape. Previously, the company’s retrenchments were much smaller. For example, it laid off 4,500 employees in FY15 and fewer than 3,000 in later years. The scale of the current layoff signals a more permanent shift in hiring strategies and business models.

The company will assist affected employees through this transition. TCS CEO K. Krithivasan said the company is prioritizing business continuity and minimizing disruptions for clients. He emphasized that this decision reflects the growing reliance on AI automation, cloud solutions, and intelligent operations. These technologies reduce the need for human intervention in many mid-level functions.

Phil Fersht, CEO of HFS Research, commented that TCS’s move is part of a wider trend across the IT sector. As a result, many companies are shifting away from traditional hiring models. Instead, they prioritize reskilling existing staff and restructuring teams to improve digital service delivery. The strategic change reflects the sector’s shift toward hyper-automation and cost rationalization.

Although some domestic roles will face cuts, the restructuring will primarily affect TCS’s European operations. Industry observers called this a “people heavy cooling” period. Margin pressures and client demand shifts are forcing firms to rethink their workforce strategies. Most layoffs will occur in delivery management and roles tied to legacy systems integration. Moreover, Tata Communications and Tata Tele Services are reassessing their headcount strategies. This follows recent rulings on telecom dues and service license liabilities. Together, these adjustments underscore how Tata Group firms are reshaping operations to weather global headwinds and evolving client expectations.

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