TCS to Layoff 12,000 Employees, or 2% of its Workforce, Due to Skills Gap and Shifts in Technology

Tata Consultancy Services (TCS) will reduce its global workforce by about 2%, approximately 12,200 employees, during FY26 (April 2025 to March 2026), as per Moneycontrol reports. The layoffs will affect employees across multiple geographies and business units, including those in middle and senior roles.

TCS stated the decision is driven by deployment feasibility and a gap between current skills and project requirements. The company said it has trained over 5.5 lakh employees in basic digital skills and 1 lakh in advanced areas, but redeployment has not been effective in all cases.

New Bench and Billability Policy

The layoffs follow changes in TCS’s internal deployment policy. Employees must now maintain a minimum of 225 billable days per year. Time spent on the bench has been capped at 35 days annually. Failure to meet these requirements may lead to disciplinary action.

Process and Severance Details

Impacted employees are being offered notice period pay, severance packages, extended insurance benefits, and outplacement support. Reports suggest that in some cases, employees were asked to resign during in-person meetings with HR, and those who do not resign may face termination without severance.

As per the report, TCS has also delayed the onboarding of around 500 lateral hires who were expected to join in June-July 2025. These delays follow client-side decision lags and changes in project scope seen in the April-June quarter.

According to the reports, client project finalisations were delayed in Q1 FY26. The company reported fewer cancellations, but several engagements saw reduced scope or pushed timelines.

Read More: TCS Q1 FY26 Results: Revenue and Net Profit Recorded Growth, Declared ₹11 Interim Dividend!

Conclusion

The job cuts, revised policies, and hiring delays indicate internal restructuring as TCS adjusts to shifts in technology and project deployment needs. The process is to continue over the next three quarters.

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