IT Giant TCS Plans Workforce Restructuring in 2025, Explained
In a significant move that is reshaping the Indian IT landscape, Tata Consultancy Services (TCS) announced layoffs of approximately 12,000 employees, representing around 2% of its global workforce. The majority of the affected employees are middle- and senior-level staff, with the layoffs primarily impacting roles that may not align with new AI-driven demands.
These layoffs signal a pivotal moment where the Indian IT industry is accelerating its shift to AI and digital-first models. This transformation necessitates workforce transformations that will reshape job roles, skills demands, and job security paradigms across the sector.
Skill Realignment and Job Market Impact
The layoffs underscore growing skill mismatches and highlight the rising challenge of unemployability among Indian IT professionals. The impacted roles largely consist of those whose skills may not align with new AI-driven demands. This intensifies focus on upskilling and reskilling programs across the sector as companies shift towards digital transformation and AI integration.
AI and Automation Influence
TCS frames the restructuring as part of embracing AI at scale and investing in emerging technologies to enhance operational agility. The layoffs are partly driven by automation and AI replacing routine or less strategic roles, pushing the workforce to move towards more complex and AI-integrated functions.
Industry-Wide Precedent and Job Security
As India's largest IT firm, TCS's move sets a precedent that could ripple across the industry. Employee unions have criticized the layoffs as hostile and raised concerns about job insecurity in the traditionally stable Indian IT sector. This may trigger wider calls for labor protections and impact employee morale across the industry.
Wage Hikes Despite Layoffs
Concurrently, about 80% of TCS’s workforce will receive salary hikes, indicating a dual approach—cost reduction through layoffs at higher levels while rewarding and retaining core talent to support new digital priorities.
Broader Employment Landscape
The layoffs bring into focus the Indian government's challenges with unemployment data transparency and the country's larger structural employment issues, exacerbated by AI and automation disrupting traditional IT jobs.
In summary, the TCS layoffs in 2025 reflect a pivotal moment where the Indian IT industry is accelerating its shift to AI and digital-first models, necessitating workforce transformations that will reshape job roles, skills demands, and job security paradigms across the sector. This change is both a challenge and an opportunity for India's IT professionals and the wider employment ecosystem.
For professionals in the IT industry, staying relevant will require a commitment to continuous learning and acquiring expertise in advanced digital technologies. Future demand in the Indian IT job market will be concentrated on roles such as AI engineers, cloud architects, cybersecurity analysts, and data scientists.
TCS has over 613,000 employees worldwide as of June 2025. The TCS layoffs are part of a larger blueprint to build a leaner, more agile organization aligned with digital transformation goals. TCS is focusing on hiring campus recruits and early-career professionals who often have the necessary modern skills.
Krithivasan, the CEO of TCS, has emphasized that TCS remains committed to investing in its employees. The company is shifting focus toward advanced analytics, AI-driven service delivery, and cloud-native engineering. The layoffs are focused on mid-level managers and senior technical staff.
As digital disruption intensifies, balancing employee interests with strategic business goals is becoming increasingly challenging. Global tech firms, including Google, Meta, and Amazon, have also initiated large-scale workforce reductions, focusing on eliminating roles that have become redundant due to automation or changing market priorities.
Despite the layoffs, TCS's revenue growth has remained strong, with annual revenue crossing the $30 billion mark in FY 2024-25. The TCS layoffs 2025 underscore the company's move towards specialized skill sets over generalist roles. The company is focusing on creating new teams skilled in emerging technologies such as machine learning, generative AI, and cloud-native platforms.
Industry associations argue that companies like TCS need to adopt a more balanced approach that prioritizes both technological transformation and employee well-being. TCS has invested heavily in reskilling efforts, offering millions of learning hours on topics such as AI prompt engineering, advanced cybersecurity, and data science. However, not all employees have been able to transition effectively into these modern roles.
Employees have expressed concerns over limited communication and clarity regarding redeployment options during the TCS layoffs. TCS is prioritizing early-career hires who bring modern coding and AI-related expertise. The company's commitment to its employees and its focus on reskilling initiatives suggest a recognition of the need to navigate this transition carefully and support its workforce through this transformation.
- As more companies, such as Google, Meta, and Amazon, follow TCS's lead in implementing layoffs, the Indian IT sector is facing a wave of unemployment that highlights the importance of upskilling and reskilling programs to adapt to AI and digital-first models (AI and Automation Influence, Broader Employment Landscape).
- To remain employable in the Indian IT industry, professionals must focus on acquiring advanced digital skills, aligning with the growing demand for roles like AI engineers, cloud architects, cybersecurity analysts, and data scientists (Skill Realignment and Job Market Impact, Future demand in the Indian IT job market).
