The shocking 12,000 layoffs in TCS may not be the end of job cuts, as analysts fear AI and automation will lead to more downsizing in the industry in the times to come.
A look at the headcount dashboard of TCS — India’s largest IT services company — over the past years shows that the company’s employee count peaked in FY23 at 6.14 lakh, and dropped in the next two fiscal years.
The employee tally grew from 4.48 lakh in FY20 to a record high of 6.14 lakh at the end of FY23, adding nearly 1.7 lakh employees in just three years. TCS experienced a notable decline of 13,249 in its workforce the following year, with the number falling to 6.01 lakh in FY24.
After FY24, the company saw a modest rebound — its employee numbers rising to 6.07 lakh in FY25 and reaching 6.13 lakh in the first quarter of FY26. In fact, between April and June 2025, the company’s workforce increased by over 5,000 employees.
The Tata Group company said on Sunday it will lay off more than 12,000 employees, or 2 per cent of its global workforce, this year. The jolt will be felt most in the middle and senior grades. The IT ministry is keeping a close watch on the entire situation and is in touch with the tech company, sources said. The ministry is concerned and will go into the underlying causes that have prompted the move.
The blue-chip stock dipped 1.76 per cent to close ₹3,079.05 apiece on the BSE on Monday, as news of layoffs sent fresh tremors in the tech circles.
Nascent Information Technology Employees Senate (NITES), an agency that addresses the grievances of IT employees, has filed a complaint with the Union labour ministry against TCS for initiating the layoff of around 12,000 employees.
“TCS has planned to terminate thousands of employees without giving them due notice or any prior intimation to the government, all of which are mandatory under existing Indian labour laws,” NITES president Harpreet Singh Saluja said in a letter addressed to labour minister Mansukh Mandaviya.
Tarun Pathak, research director at Counterpoint Research, believes TCS’s move reflects a combination of macroeconomic pressures, shifting client expectations, and a broader industry pivot toward agile, outcome-based delivery models. The introduction of a stricter bench policy underscores the focus on optimising workforce utilisation.
He observed that though TCS clarified that these cuts aren’t driven by AI, the move comes at a time when automation and AI adoption are increasingly influencing workforce decisions across the tech industry. Globally, he said, companies are reassessing roles and skills to align with new digital priorities.
“For Indian IT services companies, this marks a transition towards more efficient and performance-focused workforce models,” he said.
Faisal Kawoosa, chief analyst and founder of Techarc, noted that enterprises are expecting IT services companies to do more for less, using AI.
“So, cost pressures will further force layoffs. We should see this as part of a larger evolution of AI-driven IT where human agents will be fast replaced by AI agents who compete on skills and are proficient with current human skills,” he said.
Prabhu Ram, VP, Industry Research Group (IRG), CyberMedia Research (CMR), said the TCS layoffs highlight several headwinds the company is facing, including margin pressures and evolving client priorities amid a challenging demand environment.
TeamLease Digital CEO Neeti Sharma said every company today is looking towards an AI-led transformation—in terms of people, processes, and technology.
