India’s biggest IT company, Tata Consultancy Services (TCS), will lay off about 2 percent of its employees, which is more than 12,000 people, this year. The move comes as global uncertainty and AI-driven changes in technology continue to reduce business demand.
By the end of June, TCS had a total of 613,069 employees.
“This transition is being planned with due care to ensure there is no impact on service delivery to our clients… We understand that this is a challenging time for our colleagues likely to be affected. We thank them for their service and we will be making all efforts to provide appropriate benefits, outplacement, counselling, and support as they transition to new opportunities,” the company added.
TCS will give affected employees full pay for their notice period along with an extra severance package. The company is also planning to continue insurance benefits and help those impacted find new jobs through outplacement services.
This layoff decision comes shortly after some TCS employees filed legal complaints against the company’s updated bench policy. The new policy gives employees only 35 days in a year without being assigned to a project and requires at least 225 billable working days annually.
India’s software service companies earn over $283 billion in total and are among the biggest private employers, with TCS being the largest.
According to a report by ET on Friday, hiring at the top six IT companies dropped sharply. In the April to June quarter, only 3,847 new employees were added, a 72 percent drop compared to 13,935 hired in the previous quarter from January to March.
TCS said it is working on many important changes to grow and stay competitive. This includes putting money into new technologies, entering new markets, using AI more widely for both clients and its own work, building stronger partnerships, improving its tech systems, and changing how its teams are organized.
To make these changes happen, the company has already started training and moving employees into new roles.
