Tata Consultancy Services (TCS)has announced that it will lay off 2% of its global workforce—around 12,260 employees—in FY26. The move comes as the company accelerates its shift toward AI-driven operations, automation, and digital transformation to remain competitive amid slowing global demand.
With a total headcount of 613,069 employees at the end of Q1 (April–June) FY26, TCS said the layoffs will help streamline operations, improve productivity, and align its workforce with emerging business priorities like cloud, generative AI, automation, and next-gen digital services.
This is only the second large-scale layoff in TCS history. The last occurred in 2012 when 2,500 employees were let go due to underperformance. However, this time the restructuring reflects broader industry headwinds, including a sluggish global economy, rising inflation, geopolitical tensions, and tariff-related uncertainties affecting IT spending across North America and Europe.
TCS is investing heavily in AI and hyper-automation, reducing dependency on traditional outsourcing roles while upskilling remaining employees for roles in AI integration, data engineering, and cloud-native solutions. Analysts believe the layoffs signal a larger trend in the Indian IT sector, as companies pivot toward leaner, technology-first models to address cost pressures and client demand for faster, more automated solutions.
The company emphasized that impacted employees would receive support, including reskilling opportunities and severance benefits. However, the decision underscores how AI and automation are rapidly redefining the IT workforce, pushing companies like TCS to rethink talent strategies while future-proofing their business in a changing digital economy.
TCS remains confident that these measures will strengthen its ability to drive growth, innovation, and efficiency in an AI-led future.
