TCS to lay off 12,000 employees globally due to skill mismatch and not AI.
Despite AI upskilling efforts, redeployment challenges continue for senior professionals.
Job cuts target mid-to-senior staff.
Layoffs to be phased through FY26 with severance, health, and counselling support.
Amid Tata Consultancy Services’ (TCS) announcement to lay off 12,000 people from jobs globally, the IT firm’s CEO K Krithivasan clarified that the decision has nothing to do with artificial intelligence and its role in replacing jobs.
The job cut announcement made by India's largest IT firm will primarily affect middle and senior-grade workers, that account for about 2% of the company’s 613,000-plus workforce.
Speaking to Moneycontrol, the TCS CEO dismissed speculations on AI-led productivity gains spearheading the company’s move. He clarified that the layoffs are due to a skill mismatch and the company’s inability to redeploy certain employees in its evolving business model.
Why the Sudden Job Cut?
The job cuts is due to take place gradually through FY26 and will mainly affect mid-to-senior level employees, although some among the junior staff who are not currently deployed on any project may also be at the receiving end of the decision.
Despite investing in AI upskilling and training including training over 5.5 lakh employees in basic AI and over 1 lakh in advanced skills, the company has admitted that reskilling hasn’t always led to re-employment, especially for the senior professionals.
“Some people, especially at senior levels, find it difficult to transition to tech-heavy roles,” the CEO admitted.
Company’s Evolving Work Structure
The company is also undergoing a structural shift — moving away from the traditional “waterfall” project management method to a more agile, product-centric model. This change has reduced the need for conventional project and program managers.
Krithivasan further said, “Earlier, in waterfall models, we had multiple leadership layers. That’s changing.”
Layoffs Will be Handled Compassionately
However, the company’s CEO mentioned that the decision was difficult and unprecedented and thereby assured that TCS would handle the layoffs “in a very, very compassionate way.”
He added, “The company will offer severance packages, extended health insurance, mental health counselling, and outplacement support to those affected.”
In addition to that, the IT firm has emphasised that it will continue to remain focused on future-readiness and will continue to hire high-quality talent.
“This is not a question of demand. It is about us being future-ready,” the CEO added.
