The workforce of Tata Consultancy Services (TCS) has dropped below the 6,00,000 mark for the first time since 2022 after it carried out its largest lay-off amid pressures from the booming Artificial Intelligence (AI) sector and worsening India-US trade ties.
The country’s largest IT services exporter and private-sector employer reduced its workforce by 19,755 employees in the quarter ending September 30, stated its latest earnings report, marking a 3.2 per cent decline from the previous quarter.
The figure includes both voluntary exits and layoffs, prompting the outsourcing powerhouse to earmark ₹11.35 billion to cover severance-related costs.
TCS is now halfway through its plan to reduce 2 per cent of its workforce by March, 2026, a move announced earlier this year, which, the company said is aligned to push its AI and automation-led services.
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TCS’ Chief Human Resources Officer, Sudeep Kunnumal, told analysts that the ongoing restructuring primarily targets mid- and senior-level roles affected by what he called a "skill and capability mismatch", as reported by a leading foreign news agency.
The shake-up comes amidst growing geopolitical tensions between India and the US, especially in the backdrop of US President Donald Trump signing a proclamation that hikes US H-1B visa fees to a staggering USD 100,000 annually. Trump’s decision to impose a high 50 per cent tariffs on Indian imports may have also contributed to a clouded outlook for India’s IT majors as American clients reduce their IT spending.
Meanwhile, TCS's quarterly profits missed expectations, largely due to the one-off costs associated with the job cuts, say analysts. The downsizing, they say, is proof of an evolving digital economy impacting India’s most stable tech firm.
Kunnumal also told the news agency that TCS has been actively localising its US workforce to reduce reliance on foreign work visas.
"Our business model can adapt quickly to immigration changes," he said, adding that the company will continue to hire talent with "future-relevant skills" such as AI, machine learning, and data analytics.
As AI and automation take centre stage in global tech, TCS’s job cuts may offer a preview into what lays ahead for the rest of India’s IT sector, signaling a shift from mass manpower to tech-driven operations that prioritise innovation.
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