Why TCS Is Laying Off 12,000 workers? Fact vs Narrative

India's biggest IT services provider, Tata Consultancy Services (TCS), is making captions after its advertisement to lay off roughly 12,000 workers in the 2025 – 26 financial time. One of the biggest pool reductions in the company's history is this one. Employees, visitors, and stakeholders are naturally concerned about this change, but it has also produced a wave of rumors and false information. 

From social media posts condemning AI to enterprises about fiscal trouble, there’s no deficit of narratives around the layoffs. But what’s really passing inside TCS? In this blog, we explore the data versus the narratives, digging into what’s true, what’s inflated, and what this means for India’s IT sector. 

The Functionary advertisement What TCS Said 

TCS verified that it'll lay off about 2 of its global pool, equaling around 12,000 workers, during the fiscal time 2025 – 26. This decision, as per CEO K. Krithivasan, is part of a broader restructuring trouble and is not driven by robotization or cost- cutting alone, as numerous have assumed. 

This marks the first major layoff in the company’s long and stable history, making it a particularly significant move. 

What’s Driving the Layoffs? 

Here are the key reasons that the company and analysts have officially cited:

1. Skill Mismatch and Non-Deployment

TCS has emphasized that numerous of the impacted workers are not presently working on any systems, frequently appertained to as being" on the bench." These are largely medial to elderly- position workers who have not been stationed due to chops that no longer match the company’s evolving conditions. 
As TCS transforms its delivery model, the demand is now for workers with hands- on capabilities in areas like pall computing, AI/ ML, cybersecurity, DevOps, and nimble development. 

“This is not about AI taking over jobs. It’s about people who are unable to match the direction in which we are going,” — K. Krithivasan, CEO, TCS

2. Shift to Agile and Product-Led Delivery

TCS is moving down from its traditional cascade model to a nimble, product- concentrated operating model. This shift requires a slender structure, smaller layers of operation, and a more cooperative, hands- on pool. Accordingly, numerous mid-level directorial and collaboration places have come spare. 

3. Over-Hiring andPost-Pandemic Recalibration 

During the epidemic times (2020 – 2022), TCS aggressively expanded its pool to meet surging digital metamorphosis demands. But with global demand stabilizing and design channels decelerating, the company has set up itself with an overcapacity, especially in places not aligned with the current request demands. 

4. Not AI-Driven, But AI-Affected

Despite wide belief, TCS has rejected the idea that AI is the main reason for the layoffs. While AI is being integrated across services, it has not yet reached a position where it's replacing entire brigades. Still, AI is impacting the kinds of chops that are now in demand, which laterally affects hiring and retention. 

Common Narratives vs. Reality 

Despite wide hypotheticals, the TCS layoffs are not primarily driven by AI, but rather by a skill mismatch. Contrary to the belief that the company is floundering financially, TCS continues to post profitable and strong daily results. While numerous assume the layoffs are purely about cost- slice, the factual focus is on realigning the pool to prepare for unborn requirements. Another common myth is that freshers are being laid off, whereas the reality is that the maturity affected are medial to elderly- position professionals. Incipiently, while some claim that the entire IT assiduity is collapsing, the verity is that IT is evolving, conforming to new demands and technologies. 

Who Is Being Affected? 

Contrary to hypotheticals that the layoffs target freshers or inferior inventors, the reality is different:

• Utmost of those impacted are mid-career professionals with 5 to 20 times of experience. 
• Many have been reskilled, but are still not being deployed on projects due to restructuring of project teams.
• Some senior roles, especially in project management and delivery coordination, have become obsolete in the new agile model.

Financial Context

TCS’s headcount as of March 2025 stood at 613,000 employees, making it one of the largest private employers in India. However, the company’s employee cost-to-revenue ratio had grown significantly.

Analysts estimate that reducing the workforce by 12,000 could help save around 4% of total employee costs, which contributes to 12% of its net profit.

That said, the company has not indicated any signs of distress. Revenues and profits are stable, though margins have been slightly pressured due to rising global costs and slower deal closures.

What This Means for the IT Industry

This move by TCS reflects a broader paradigm shift in the Indian IT services sector:

1. From Headcount to Value

Indian IT companies have traditionally competed on cost and scale, often billing clients based on manpower. That model is now giving way to outcome-based delivery, where fewer people can deliver more value using automation and cloud-native architectures.

2. The End of the "Sholay Era"

Industry experts like CP Gurnani have called this the end of the “Sholay Era”—a time when having “kitne aadmi the?” (how many people?) defined success. The future is about skill, speed, and adaptability.

3. Global Impact

This is not just an Indian phenomenon. Global IT companies are facing similar pressures. In recent years, companies like as Accenture and Cognizant have also laid off employees, but for different reasons. 

Employee Support and Backlash

TCS has promised a dignified and humane exit process, which includes:

• Notice period compensation
• Extended medical benefits
• Mental health counseling
• Outplacement assistance
• Access to internal job boards and upskilling platforms

Still, hand unions like NITES (incipient Information Technology workers Senate) have raised enterprises over lack of translucency in the layoff process and have approached labor authorities for disquisition. 

What Professionals Can Learn

Whether you're a current hand, job candidate, or IT applicant, then are five assignments from the TCS layoff: 

1. Upskill Constantly: Cloud, AI/ ML, data wisdom, and cybersecurity are now core chops.
2. Stay Hands- On: Indeed elderly professionals need to be technically applicable. 
3. Suppose Product, Not systems: Product thinking is the new currency. 
4. Be nimble: Rigidity and inflexibility are as important as rendering chops. 
5. Unborn- evidence Your Career: Don’t depend solely on employer- driven literacy — be visionary. 

Conclusion A Reset, Not a Collapse 

TCS’s decision to lay off 12,000 workers marks a critical moment in the elaboration of India’s IT assiduity. While unfortunate for those directly affected, this move is not a sign of failure but of strategic realignment. 

The IT assiduity is transitioning from people- ferocious to chops- ferocious, and associations are restructuring to remain competitive in a pall- native, AI- powered world. 

The challenge — and the occasion — for professionals lies in how well they acclimatize to this new normal. Because the verity is the Indian IT sector is not shrinking; it’s transubstantiating.