TCS trims nearly 20,000 jobs in steepest workforce cut amid AI disruption, global uncertainty

October 28, 2025

New Delhi: Tata Consultancy Services (TCS), India’s largest IT exporter, has undertaken its most extensive round of layoffs to date, cutting nearly 20,000 jobs over the past three months as the company restructures to adapt to the twin challenges of artificial intelligence (AI) adoption and sluggish global demand.

According to TCS’s latest quarterly filing, the IT major reduced its headcount by 19,755 employees in the quarter ending September 30, bringing its total workforce below six lakh for the first time since 2022. The reduction  comprising both voluntary exits and targeted layoffs  represents about 3.2% of the company’s total employees. TCS has allocated ₹1,135 crore to cover severance and restructuring-related costs.

Company executives said the layoffs were primarily concentrated in mid- and senior-level roles that no longer align with the firm’s evolving technology roadmap. Chief Human Resources Officer Sudeep Kunnumal told analysts that the restructuring addresses a “skills and capability mismatch” as TCS accelerates its transition toward AI and automation-driven services. The company plans to trim roughly 2% of its global workforce by March 2026.

The move comes despite TCS delivering an operationally strong second quarter, though profits were hit by one-time layoff costs. Analysts at Citi said the cuts reflect a weaker business outlook, with shrinking tech budgets and geopolitical uncertainty weighing on demand.

TCS’s challenges are compounded by proposed U.S. trade and immigration policy changes, including plans to raise H-1B visa fees and impose higher tariffs on Indian goods — moves that could impact outsourcing-heavy sectors. In response, TCS has been localising its U.S. operations to reduce visa dependency and plans to hire more talent skilled in AI, machine learning, and data analytics.

Industry observers view the sweeping job cuts as a watershed moment for India’s $280 billion IT services industry — signalling a structural shift from manpower-intensive outsourcing toward leaner, high-tech operations built around automation and innovation.