Daijiworld Media Network - Bengaluru

Bengaluru, Oct 21: Tata Consultancy Services Ltd. (TCS), India’s largest private-sector employer, has carried out its steepest-ever workforce reduction, cutting 19,755 employees in the quarter ended September 30. The cuts include both layoffs and voluntary exits, marking a 3.2% drop in staff, bringing total employees below 600,000 for the first time since March 2022.

The company made a provision of Rs 11.35 billion ($128 million) for severance costs, as part of a planned headcount reduction primarily targeting middle and senior-level employees due to “skill and capability mismatch,” said Chief HR Officer Sudeep Kunnumal. TCS aims to trim 2% of its workforce by March 2026, adapting to new technologies such as generative AI.

Analysts at Citi noted that the move reflects a weaker business outlook, with TCS’s quarterly profits missing expectations mainly due to one-time severance costs.

External challenges have compounded pressures on India’s IT sector. Measures by the US government, including H-1B visa restrictions and tariffs on India, have created additional uncertainty, affecting IT spending and hiring patterns. In response, TCS has localized its US workforce to reduce dependency on visas and plans to continue hiring talent with “future-relevant skills.”

As the IT services sector navigates technological disruption and geopolitical uncertainty, TCS’s record layoffs signal a new phase of transformation in India’s $280 billion IT industry.