Wednesday, 30 July 2025

TCS Layoffs & the Future of Work: Navigating the AI Era

TCS Announces Major Workforce Reduction

In a significant move, Tata Consultancy Services (TCS) has announced plans to lay off approximately 2% of its global workforce — around 12,200 employees — over the fiscal year 2025–26. The reduction will be carried out gradually and is expected to affect primarily mid- and senior-level employees.this decision has sparked widespread conversations about automation, reskilling, and the evolving nature of jobs in the tech industry.

AI or Skills Misalignment?

TCS CEO K. Krithivasan has clarified that the layoffs are not directly due to Artificial Intelligence (AI), but rather due to skill mismatches and redeployment challenges.

however, the company has openly embraced AI and automation as part of its “future-ready” transformation model, aimed at restructuring operations and optimizing productivity through emerging technologies.

Bench Policy Tightens

TCS has also introduced significant changes to its bench policy, which governs how long employees can remain unassigned to client projects. Under the new rules:Employees must spend at least 225 billable days on projects annually.remaining on the bench for more than 35 days may result in negative consequences, including pressure to resign.this shift signals a tightening of operational efficiency, aligning workforce availability with client demand.

Severance & Market Reaction

Affected employees will be offered:

Notice periods
Severance packages
Outplacement support
Other employment benefits
Despite this, the announcement led to an ₹28,148 crore drop in TCS’s market capitalization, equating to a 1.23% decline in share value.

The Bigger Picture: AI and the Job Market

This development reflects a broader global trend where AI and automation are reshaping job markets. According to the World Economic Forum (WEF):by 2030, over 90 million traditional jobs may be lost globally.however, around 170 million new jobs are expected to emerge, mainly in tech, green energy, digital health, and AI management sectors.the key takeaway the future job landscape will prioritize adaptability, reskilling, and technological fluency

Analysis & Conclusion

TCS’s decision is a strategic move to align its workforce with future business needs — focusing on cost-efficiency, automation, and relevant skills.while the leadership asserts AI isn’t the direct cause, the adoption of AI-driven operating models is undeniably influencing these structural changes.this case serves as a critical reminder for professionals across industries: the need to upskill, cross-skill, and remain agile is more pressing than ever.