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High technology industry

TCS Layoffs: CEO Clarifies AI Misconception, Reveals Phased Approach and Compassionate HR Policies

Strategic Insights

— 1 min read

Tata Consultancy Services (TCS) CEO K. Krithivasan has addressed the growing concerns surrounding the company's upcoming layoffs, affecting approximately 2% of its global workforce, or around 12,261 employees. The layoffs have sparked industry speculation, with many attributing the move to the growing influence of Artificial Intelligence (AI) in the industry. However, Krithivasan contradicts this notion, stating that the decision is not driven by AI's productivity gains, but rather by situations where there is a skill mismatch or inability to deploy employees effectively. The layoffs will be implemented gradually throughout fiscal year 2026, with affected employees receiving notice-period pay, severance benefits, extended insurance coverage, outplacement support, and counseling services.

Key Takeaways:

  • TCS CEO K. Krithivasan attributes the layoffs to skill mismatch and inability to deploy employees, rather than AI's productivity gains.
  • The layoffs will affect approximately 2% of the global workforce, or around 12,261 employees.
  • The layoffs will be implemented gradually throughout fiscal year 2026, with a phased approach to minimize disruption.
  • Affected employees will receive compassionate HR support, including notice-period pay, severance benefits, extended insurance coverage, outplacement support, and counseling services.
  • The layoffs are part of a broader industry trend, where companies are adapting to the impact of AI on their operations and workforces.
  • HFS Research CEO Phil Fersht anticipates this rebalancing trend will continue for roughly a year, as firms prioritize training junior talent for AI-driven solutions and managing employees who struggle to adapt to the evolving "services-as-software" model.

Statistics:

  • 2% of TCS's global workforce, or around 12,261 employees, will be affected by the layoffs.
  • 20% productivity gains claimed by AI, but dismissed by Krithivasan as the primary reason for the layoffs.
  • 2026 fiscal year, during which the layoffs will be implemented gradually.
  • 1 year anticipated duration of the industry trend to rebalance workforces and adapt to AI-driven solutions.

Sources:

  • Krithivasan, K. (2025, Interview with Moneycontrol).
  • Fersht, P. (2025, Interview with Hindustan Times).
  • Copyright 2025 IE Online Media Services Pvt. Ltd., distributed by Contify.com.

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