Layoffs in the tech industry have been hitting the headlines non-stop. From Silicon Valley giants to Indian IT powerhouses, no company seems immune. Recently, Tata Consultancy Services (TCS)—India’s largest IT services firm—has come under the spotlight for its workforce cuts. Considering TCS has long been viewed as one of the most stable employers in India’s tech scene, the news of layoffs raised a lot of eyebrows.
So, what’s going on? Why is TCS, a company that has consistently posted profits and growth, trimming its workforce? Let’s break it down in plain English.
Understanding the TCS Layoffs
What Happened?
Reports suggest that TCS has laid off hundreds of employees in recent months, primarily targeting underperformers and non-billable staff. Unlike mass layoffs in Western tech firms, TCS has positioned this as part of its “performance management” system.
Why It Matters
For decades, TCS was considered a safe haven for IT professionals—offering stability, job security, and growth opportunities. Layoffs at TCS signal that even Indian IT giants are not fully shielded from global challenges.
Why Is TCS Cutting Jobs?
1. Global Economic Slowdown
Companies around the world are tightening budgets. When clients cut IT spending, outsourcing firms like TCS take the hit.
2. AI and Automation
The rise of generative AI and automation means many traditional IT roles are becoming redundant. TCS, like its peers, is rethinking where it needs human workers.
3. Utilization Pressure
In IT services, “bench time” (employees not assigned to projects) is costly. TCS is trimming its bench to improve margins.
4. Competitive Pressures
TCS faces stiff competition from Infosys, Wipro, Accenture, and HCL. To stay agile, it must reduce inefficiencies.
A Look Back: Has TCS Done Layoffs Before?
TCS has traditionally avoided large-scale layoffs, instead preferring natural attrition. However, in recent years:
- 2020 Pandemic: Hundreds were laid off, citing performance issues.
- 2023–2024: Reports surfaced of “silent layoffs” targeting non-performers.
- 2025: The latest wave sparked more attention because it came amid rising revenues.
Impact on Employees
Shock Among Workers
Many employees expressed disappointment, especially because TCS is known for stability. Losing a job at TCS feels like “the ground shifting under your feet” for long-time staff.
Freshers at Risk
Reports suggest some freshers who failed to clear internal assessments were let go, creating panic among new recruits.
Mid-Level Managers
With TCS pushing for cost optimization, mid-level employees with stagnant skills are more vulnerable than ever.
Return-to-Office and Its Connection to Layoffs
TCS has been strict about bringing employees back to offices post-pandemic. Unlike companies offering hybrid models, TCS demands near full-time presence.
Some speculate that layoffs may also be connected to identifying employees unwilling to relocate back to offices. Essentially, it’s a way to filter the workforce.
The Bigger Trend: Indian IT Firms and Layoffs
TCS isn’t alone. Here’s a quick comparison:
- Infosys: Delayed hiring and reduced fresher onboarding.
- Wipro: Cut back on new hires and trimmed teams.
- HCL: Implemented performance-linked exits.
Clearly, the IT services industry is undergoing a major transformation.
How TCS Is Justifying the Layoffs
Performance-Based Terminations
TCS insists that these are not “layoffs” in the Western sense but part of annual performance management.
Skill Gaps
The company says employees who don’t upgrade to digital, AI, or cloud skills may struggle to find projects.
Business Alignment
According to leadership, trimming underperformers ensures that the best talent is aligned with client needs.
Employee Morale and Reactions
The Trust Issue
For years, TCS sold itself as a career-for-life employer. Now, employees are questioning whether that trust is still valid.
Social Media Buzz
LinkedIn is flooded with posts from ex-TCS employees sharing layoff experiences, often calling it unfair.
The Fear Factor
Even those still in jobs are nervous—wondering if they’re next. This creates a culture of fear, not innovation.
The Role of AI in the Layoffs
AI is at the heart of this shift. Let’s face it: many IT jobs—manual testing, repetitive coding, basic support—can now be done faster and cheaper by machines.
TCS is investing heavily in AI, including partnerships with Microsoft and Google. But this also means employees who don’t reskill risk becoming irrelevant.
Client Pressures Driving Workforce Cuts
TCS works with global giants in banking, healthcare, and retail. These clients are demanding more for less. If TCS doesn’t cut costs, it risks losing contracts. Unfortunately, cost savings often start with headcount.
Layoffs and the Fresher Hiring Freeze
While TCS previously hired thousands of fresh graduates annually, the intake has slowed dramatically. For students hoping to join TCS, the dream job is no longer guaranteed.
How Layoffs Could Affect TCS’s Reputation
- Employer Branding: TCS might lose its “safe employer” tag.
- Talent Acquisition: Top talent may prefer startups or competitors seen as more progressive.
- Customer Perception: Clients may worry about delivery quality if morale drops.
The Future of Work at TCS
Reskilling as the Only Way Forward
Employees need to embrace cloud, AI, and cybersecurity to stay relevant. TCS itself is investing in upskilling programs, but not everyone makes the cut.
Hybrid Work vs. RTO
TCS’s strict stance on office presence could backfire, especially when younger talent demands flexibility.
Global Expansion
Despite layoffs, TCS is expanding in new markets like Europe and the Middle East, which may create fresh opportunities.
What Employees Can Do
- Stay Proactive: Don’t wait for a layoff notice—upskill now.
- Diversify Skills: Move beyond traditional IT into data, AI, and cloud.
- Network Actively: Build a strong LinkedIn presence; you never know when it’ll come in handy.
- Explore Startups: Sometimes, smaller companies offer faster growth than IT giants.
The Silver Lining
Layoffs, while painful, could make TCS leaner and more competitive. For employees, it’s a wake-up call: the IT industry isn’t the “job for life” it once was. Those who adapt will thrive.
Conclusion
The TCS layoffs remind us that no company, no matter how big, is completely shielded from change. While TCS insists the cuts are “performance-based,” the reality is that global economic pressures, AI, and client demands are reshaping the entire IT services industry. For employees, the message is clear: reskill, adapt, and be future-ready.
TCS may be trimming its workforce today, but the company is also positioning itself for a stronger tomorrow. The big question is: will its employees be ready to ride that wave of transformation, or will they be left behind?
FAQs
1. Why is TCS laying off employees?
TCS is cutting jobs due to performance issues, global economic slowdown, and rising automation through AI.
2. Are the layoffs mass firings like in the U.S.?
Not exactly. TCS calls them performance-based exits, but they still affect hundreds of workers.
3. Are freshers safe from TCS layoffs?
Not entirely. Some freshers who failed internal assessments have been let go.
4. Will TCS continue hiring new employees?
Yes, but at a slower pace. The company is more selective and focuses on digital skills.
5. What can employees do to avoid layoffs?
Upskilling in AI, cloud, and cybersecurity is the best way to remain valuable at TCS.