The TCS AI job cuts include both company-initiated terminations and voluntary departures, with the company provisioning 11.35 billion rupees ($128 million) for severance-related costs during the quarter. Chief Human Resources Officer Sudeep Kunnumal confirmed the reductions are part of a planned headcount reset targeting mid and senior-level roles due to skill and capability mismatch.
TCS is halfway through a strategic target to reduce its workforce by 2% by March 2026, impacting approximately 12,000 employees overall. The company emphasized the reductions stem from difficulties in redeploying trained staff, particularly senior professionals struggling to transition into technology-heavy roles despite massive upskilling initiatives.
CEO K Krithivasan firmly dispelled speculation that the TCS AI job cuts result from AI replacing human workers or productivity gains. In an interview with Moneycontrol, he stated the layoffs are driven by skill mismatches and deployment challenges rather than AI-induced automation eliminating positions.
However, industry analysts note the broader context reveals AI’s transformative impact on project structures and skill requirements. Projects have become shorter, teams leaner, and traditional skills like testing are becoming outdated rapidly as clients demand speed, precision, and AI-based solutions.
Despite the TCS AI job cuts, the company has invested significantly in workforce training for emerging technologies. TCS has trained over 550,000 employees in basic AI skills and more than 114,000 people possess higher-order AI capabilities. The company logged 15 million hours of employee training in emerging technologies during the quarter.
The challenge lies in effectively redeploying trained personnel into new roles. Krithivasan acknowledged that while TCS has invested substantially in providing career growth and deployment opportunities, redeployment hasn’t been effective in certain areas, particularly at senior levels where professionals find transitioning to tech-heavy roles difficult.
IT employees’ body Nascent Information Technology Employees Senate (NITES) called the TCS AI job cuts illegal and sought intervention from Union Labour Minister Mansukh Mandaviya. The organization demanded directions to halt all terminations and reinstate affected employees, arguing the retrenchment violates labor regulations.
HR firms including Transearch, CIEL HR, and Michael Page reported an uptick in queries from TCS employees seeking new positions even before the official announcement, as many anticipated imminent job cuts. The company will provide severance packages, outplacement services, and extended benefits to affected employees.
The TCS AI job cuts reflect broader challenges facing India’s IT sector, which employed just over five million people in 2024 while contributing 7% to GDP and accounting for 50% of services exports. The sector has traditionally provided the most straightforward path to upward economic mobility for India’s engineering graduates.
Industry observers note that strained US-India ties and rapid AI adoption are fundamentally reshaping the IT services landscape. TCS leadership indicated that client decisions have slowed, with projects being delayed rather than cancelled, affecting staffing and onboarding timelines across the industry.
The company’s quarterly attrition rate in IT services stood at 13.8% at the end of the first quarter, up 50 basis points sequentially. Net attrition during the quarter exceeded 5,000 employees, and TCS announced it would recalibrate lateral hiring based on demand outlook while honoring all job offers for the rest of the year.
Looking ahead, analysts predict mid-level roles and traditional skills may continue facing disruption as automation, cloud services, and AI dominate hiring and deployment strategies. The TCS AI job cuts signal not just workforce reduction but a fundamental shift in how IT firms operate to remain relevant and competitive.
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