AI in action: Examining TCS’s strategy to automate and reskill its staff

New Delhi: Tata Consultancy Services (TCS) has attributed its decision to release about 12,261 employees, 2 per cent of its 613,069-strong workforce, to its goal of deploying “AI at scale” and realigning for emerging technologies. 

Yet questions remain over which roles will be phased out and how effectively displaced professionals can transition into AI-driven functions.

Workforce numbers and strategic rationale

As of June 30, 2025, TCS employed 613,069 people globally, up by 5,000 in Q1 FY26, even as it announced that middle and senior grades would bear the brunt of the 2 per cent headcount reduction. 

In an official statement, MD & CEO K. Krithivasan said the cuts form part of efforts to invest in “new-tech areas, entering new markets, deploying AI at scale, deepening partnerships, creating next-gen infrastructure and realigning our workforce model.”

Reskilling and redeployment initiatives

TCS has rolled out reskilling and redeployment programmes aimed at moving affected associates into areas such as cloud services and AI. The company has pledged “appropriate benefits, outplacement, counselling, and support” for those released. 

However, industry observers note that shifting from legacy enterprise technologies to AI and automation platforms requires extensive upskilling, often beyond the scope of short-term certification courses.

Financial context and demand headwinds

TCS’s Q1 FY26 results showed revenue growth of 1.3 per cent year-on-year to ₹ 63,437 crore and a 5.9 per cent rise in net profit to Rs 12,760 crore. Krithivasan warned that “demand contraction” driven by macroeconomic uncertainty and delayed discretionary spending made double-digit growth unlikely in FY26. These headwinds have prompted several Indian IT firms to reassess their cost structures.

Global tech layoff landscape

TCS’s 12,261 releases echo broader trends in the technology sector. Microsoft has cut over 15,000 jobs (7 per cent of its workforce) in 2025, and data from Layoffs.fyi show more than 80,000 tech layoffs across 169 companies this year, following 150,000 reductions at 551 firms in 2024.

Such widespread downsizing underscores the tension between automation-driven efficiency and workforce stability.

Balancing automation with human expertise

As TCS embeds AI and automation across its delivery centres, from test-automation bots to data-pipeline orchestration, the company must ensure that its reskilling academies can equip seasoned professionals for new roles. 

The success of this realignment will hinge on clear career paths into AI-driven services and the preservation of institutional knowledge that underpins TCS’s competitive edge.