Tata Consultancy Services (TCS), the largest IT services firm in India, has begun a significant workforce restructuring that will affect over 12,000 employees worldwide. This decision represents nearly 2% of its workforce and is a response to changing client needs, accelerating automation, and the urgent requirement for modern digital skills. A report from Money Control highlights that those employees whose skills no longer match the company’s evolving business focus are most impacted, primarily mid to senior-level professionals. The restructuring process started in August and September this year, with most adjustments already made and only a few employees still under consideration for redeployment.
To assist those affected, TCS is providing some of the most substantial severance packages available in the Indian IT sector. Employees will receive three months of notice pay along with a severance package that ranges from six months to two years of salary, based on their tenure. Employees with over 15 years of service whose roles have been declared redundant will be eligible for the maximum severance, equivalent to two years’ salary. Conversely, those who have been unallocated to projects for over eight months will receive only the three months of notice pay. Long-serving employees with 10 to 15 years of experience may receive severance equivalent to about 1.5 years of salary.
In a statement to India Today Tech, TCS noted, “In line with our company’s values, those affected by our recent initiative to realign skills have been provided care and support appropriate to their individual circumstances.” In addition to financial compensation, the company is offering career transition assistance, including outplacement services with agency fees covered by TCS for up to three months. In some cases, extra support like mental health counseling through the “TCS Cares” program is also being offered. Employees eligible for early retirement will receive full retirement benefits plus additional severance based on their tenure. TCS CEO K Krithivasan described this decision as one of the most challenging of his career.
Leadership has stressed that while the layoffs are difficult, they are essential for the company to remain agile in a highly competitive and rapidly changing technology landscape. The Resource Management Group (RMG) is also assisting employees in finding other project opportunities within TCS before the severance takes effect. However, for many, especially those in traditional roles that have been automated or eliminated, redeployment options are limited. The announcement has already affected market sentiment, with TCS shares falling 0.94% to Rs 2,932.50 during Friday trading, while Tech Mahindra saw a decline of 1.03% to Rs 1,429.05.
As the IT sector undergoes swift transformation, TCS’s restructuring highlights the broader reality facing tech companies: success will favor those who continuously adapt and enhance their skills.