India’s largest IT services provider, Tata Consultancy Services (TCS), will reduce its workforce by 2 percent in the 2025-26 financial year, the company said on Sunday. The move, which primarily targets middle and senior management roles, will affect approximately 12,200 employees out of its 6,13,000-strong global workforce.
TCS said the reduction is part of a broader transition involving the deployment of artificial intelligence and other technologies, alongside its expansion into new markets and efforts to navigate uncertain demand conditions.
“This transition is being planned with due care to ensure there is no impact on service delivery to our clients,” the company said in a statement.
India’s $283 billion IT sector is under pressure as clients cut back on non-essential technology spending due to weak global demand, persistent inflation, and uncertainty surrounding US trade policy. TCS chief executive K Krithivasan recently noted delays in client decision-making and the start of new projects.
Reuters quoted Phil Fersht, chief executive of IT advisory firm HFS Research, as saying that AI is reshaping the sector’s traditional reliance on large human workforce. “This people-heavy services model is forcing large providers such as TCS to re-balance their workforce to maintain profit margins and remain competitive, especially as clients demand price reductions of 20 to 30 percent,” he said.
Fersht added that TCS’s decision is particularly significant given the company’s longstanding reputation for job stability, underscoring a broader shift in the industry.