TCS to cut 2% workforce by FY26, cites AI disruption and skill mismatch: Report

Tata Consultancy Services (TCS), India’s largest IT services firm, is set to reduce its global workforce by 2 percent – impacting around 12,000 employees – as part of a restructuring plan to adapt to rapid technological shifts, particularly in artificial intelligence. The move was confirmed by CEO K Krithivasan in an interview with Moneycontrol.

“This will impact roughly 2 percent of our global workforce, primarily at middle and senior levels,” Krithivasan said. “It has not been an easy decision and one of the toughest decisions I have had to take as CEO.”

The layoffs are set to take place through the fiscal year 2026, running from April 2025 to March 2026. TCS, with a global headcount of 6,13,000 as of the June 2025 quarter, will see around 12,200 employees affected across geographies and business domains.

Krithivasan said the move is being driven by the need to stay competitive amid structural shifts in the tech industry. “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. We have been deploying AI at scale and evaluating skills we will be requiring for the future.”

He added that the company has made significant efforts to train and redeploy internal talent. “We have invested a lot in associates in terms of how we can provide them with career growth and deployment opportunities. Still, we find that there are roles where redeployment has not been effective.”

The decision comes with a focus on maintaining a “compassionate” exit process, he said. “It’s a difficult call we have to take to build a stronger TCS,” Krithivasan told Moneycontrol. Impacted employees will receive notice period pay, severance packages, extended insurance cover, and access to outplacement support.