TCS Layoffs: Here's What Impacted Employees Will Get as Exit Package

Tata Consultancy Services (TCS) plans to reduce its global workforce by up to 2% (around 12,000 employees) in FY26. CEO K. Krithivasan clarified that the layoffs are due to skill mismatches, not AI-driven productivity gains.

In a move that has rattled India's IT sector, Tata Consultancy Services (TCS) is set to let go of as much as 2% of its global workforce, a decision that could impact more than 12,000 employees. As the tech industry continues to navigate uncertain waters with waves of layoffs and rapid automation, TCS's announcement has raised particular concern among middle and senior-level professionals.

However, TCS CEO K. Krithivasan wants to set the record straight: this is not another case of Artificial Intelligence taking over jobs.

'Not an AI purge,' says CEO

Speaking to a news organisation, Krithivasan dispelled rumours that AI-led productivity was behind the cuts. "This is not because of AI giving some 20% productivity gains," he said.

Instead, the real issue, according to him, lies in skill mismatches and the inability to deploy certain employees effectively across projects.

Layoffs to be phased, not abrupt

Krithivasan also stressed that the layoffs will be implemented gradually throughout FY26, not in a rush. "We won't do it in a hurry. We will first talk to the people that could be impacted. We will provide them an opportunity," he said. Only when redeployment options are exhausted will the layoffs proceed.

TCS has assured that it will adopt a compassionate approach, ensuring that affected employees receive proper support, including notice-period pay, severance benefits, extended insurance, outplacement support, and counselling services.

AI still reshaping the industry

While TCS has downplayed AI's direct role in this round of job cuts, industry experts believe AI is indeed shifting the IT services landscape.

Phil Fersht, CEO of HFS Research said, "The impact of AI is eating into the people-heavy services model," adding that firms like TCS must rebalance their workforces to stay competitive. He expects this transition, toward more AI-integrated operations and fewer roles dependent on manual effort.