TCS announces its largest ever layoff of 12,000 employees as AI reshapes India’s IT sector, pushing a shift toward agile, tech-driven delivery models.
TCS biggest Layoffs Signal Major Shift in India’s IT Landscape
On August 8, 2025, Tata Consultancy Services (TCS) announced plans to lay off over 12,000 employees, accounting for about 2% of its workforce. This marks the company’s largest downsizing to date, primarily affecting mid- and senior-level staff across the organization.
What’s Driving the Cuts? AI and the Push for Agility
TCS management attributes the workforce reduction to a “skill mismatch” and the need to build a leaner, more future-ready organization. Their goal: pivot toward agile operations powered by AI and automation tools like GenAI and ChatGPT, which are increasingly handling coding, testing, and customer support tasks.
This move reflects a broader strategic overhaul not a temporary measure.
The Changing IT Delivery Model
India’s traditional IT staffing pyramid bolstered by layers of entry-level and middle management is being replaced by smaller, highly skilled teams. Companies are betting on technology-driven delivery models over headcount growth.
Roles involving routine, rule-based tasks such as manual testing, customer support, and infrastructure maintenance are under pressure. Experts predict that up to 500,000 jobs in the outsourcing industry may vanish in the next two to three years unless workers adapt.
Evolving Workforce Expectations
TCS has already trained over 650,000 employees in AI and emerging technologies. Still, not all staff have successfully transitioned to new roles. The company now emphasizes redeployment, with policies requiring associates to find new assignments within a strict 35-day window or risk termination.
Industry-Wide Impact and Risks Ahead
TCS’s action has sent ripples throughout India’s $283 billion outsourcing sector. Analysts warn this is a **“canary in the coal mine” **a signal that software service firms must transform or face disruption.
Other major IT players may soon follow suit. For workers, the message is clear: transform or be left behind.
