Manas Dasgupta
NEW DELHI, July 27: India’s largest IT services provider Tata Consultancy Services will reduce its workforce by 2 per cent in its 2026 financial year, meaning cutting out about 12,000 jobs, primarily affecting middle and senior management, the company said on Sunday.
The company is retraining and redeploying staff as it enters new markets, invests in new technology and deploys AI, but about 12,200 jobs will be cut as part of the process, it said. “This transition is being planned with due care to ensure there is no impact on service delivery to our clients,” the company added.
India’s $283 billion IT sector has had to contend with clients holding back non-essential technology spending because of weak demand, persistent inflation and lingering uncertainty over US trade policies.
TCS Chief Executive K Krithivasan said the move aimed at making the IT giant more agile and future-ready amid rapid disruptions in technology.
Explaining the rationale behind the move, Mr Krithivasan said the ways of working were are changing and there was a requirement to be future-ready and agile. He added that they have been calling out new technologies like AI and operating model changes.
Krithivasan said they have been deploying AI at scale and evaluating skills they will be requiring for the future. “We have invested a lot in associates in terms of how we can provide them with career growth and deployment opportunities,” he added.
Krithivasan argued that they found that there were roles where redeployment hasn’t been effective. “This will impact roughly 2 per cent of our global workforce, primarily at middle and senior levels,” he said.
India’s largest IT services company added 6,071 employees during the April-June 2025 quarter. With this, the total number of TCS employees stood at 6,13,069 as of June 30, 2025. On a net basis, TCS’ headcount increased by 5,090 employees in the first quarter of the fiscal, according to a regulatory filing. Its IT services attrition rate (last twelve-month basis) inched up to 13.8 per cent in Q1 FY26, compared with 13.3 per cent in the previous quarter. The attrition had stood at 13 per cent in the December 2024 quarter.
According to reports, TCS is expected to roll out lower salary hikes this year between 4 per cent and 8 per cent. This hike will be the lowest in the past four years. TCS had rolled out a salary increment of 10.5 per cent in FY22, 6-9 per cent in FY23, and 7-9 per cent in FY24.
The country’s largest IT services company on July 10 had reported a 5.98 per cent rise year-on-year (YoY) in its net profit to Rs 12,760 crore for the first quarter ended June 30, 2025 (Q1 FY26). On a quarter-on-quarter (QoQ) basis, the net profit grew 4.38%. It had reported a net profit of Rs 12,040 crore a year ago and Rs 12,224 crore in the previous quarter.
However, its revenue from operations during April-June 2025 stood at Rs 63,437 crore, which is 1.13 per cent higher as compared with the Rs 62,613 crore reported last year. On a sequential basis, the revenue fell 1.61%.