TCS workforce realignment signals 'juniorisation' as 12,261 senior employees face layoffs

Mumbai: Tata Consultancy Services (TCS), India’s largest IT services firm, is undergoing its biggest workforce realignment in years, announcing the layoff of about 2 per cent of its global employee base, roughly 12,261 roles, primarily impacting middle and senior grades.

The move comes even as TCS added 5,000 fresh graduates in the April-June quarter, many recruited from Tier-II and Tier-III engineering campuses. As of June 30, 2025, the company’s workforce stood at 6,13,069.

The twin trends, significant fresher hiring and a sharp reduction in senior staff, reflect a broader shift in TCS’s talent pyramid, echoing similar moves across the global tech sector. At a recent recruitment drive in Indore, thousands of young graduates queued for coding tests, underscoring the fierce demand for entry-level opportunities. In contrast, exit interviews in Chennai and other TCS centres reveal concerns among outgoing project leads and managers over the rapid “juniorisation” of delivery teams.

In a statement, TCS described the layoffs as part of its “journey to become a future-ready organisation,” citing strategic initiatives across technology investment, AI deployment, market expansion, and the creation of next-generation infrastructure. The company said, “A number of reskilling and redeployment initiatives have been underway. As part of this journey, we will also be releasing associates from the organisation whose deployment may not be feasible. This will impact about 2 per cent of our global workforce, primarily in the middle and the senior grades, over the course of the year.”

TCS added that it would provide “appropriate benefits, outplacement, counselling, and support” to the impacted employees.

Revenue growth lags as macro headwinds persist

The workforce restructuring comes as India’s top IT firms, including TCS, grapple with muted demand and single-digit revenue growth in Q1FY26. TCS reported a modest 1.3 per cent year-on-year rise in revenue to Rs 63,437 crore, while net profit grew 5.9 per cent to Rs 12,760 crore.

Managing Director and CEO K Krithivasan pointed to a “demand contraction” triggered by persistent macroeconomic and geopolitical uncertainties. “We do not see double-digit revenue growth in FY26,” he said, adding that delays in client decision-making had “intensified,” stalling discretionary IT spends that typically drive growth.

Industry-wide reshaping as tech giants cut jobs

TCS’s workforce realignment mirrors a global trend of tech layoffs as companies refocus for the AI era and adjust to uncertain economic conditions. In 2025, Microsoft alone has announced the layoff of over 15,000 employees, about 7 per cent of its global workforce. Microsoft CEO Satya Nadella, in a memo to over 200,000 employees, said the layoffs had been “weighing heavily” on him, reflecting on the volatile nature of the technology industry: “Progress isn’t linear. It’s dynamic, sometimes dissonant, and always demanding. But it’s also a new opportunity for us to shape, lead through, and have greater impact than ever before.”

Data from Layoffs.fyi, a platform tracking global tech industry layoffs, shows that more than 80,000 tech jobs have been cut across 169 companies in 2025 so far. In 2024, that figure was 1.5 lakh across 551 companies. The sharp reduction in headcount coincides with deep debates within the industry about the impact of AI on jobs, workforce structures, and employability.

Balancing the pyramid: Risks and opportunities

As TCS shifts its workforce model toward a more youthful base, HR strategists and industry analysts warn of potential risks if mentorship and knowledge transfer lag behind the pace of change. The challenge for India’s largest IT employer will be nurturing tomorrow’s leaders from today’s freshers, ensuring that the loss of experience does not undermine the company’s delivery excellence, a reputation built over decades.

For TCS and its peers, the coming quarters will test whether the new pyramid can deliver not just on cost and agility but also on quality and client trust amid an industry in flux.