TCS layoffs: IT ministry ‘closely monitoring’ 12,000 job cuts, claims report; IT union Calls tech firm’s move illegal

In a major shake-up in India’s IT sector, Tata Consultancy Services (TCS), the country’s largest software services exporter, is set to lay off 12,000 employees, marking the biggest downsizing in Indian IT history. The announcement has sent ripples across the industry, raising questions about job security, automation, and the future of tech employment in the country. TCS layoffs: IT ministry ‘closely monitoring’ 12,000 job cuts, claims report; IT union Calls tech firm’s move illegal.

According to official sources, the layoffs account for approximately 2% of TCS’s global workforce, which stood at over 6 lakh employees as of June 2025. The job cuts will primarily impact mid- and senior-level staff, especially those who have remained “on the bench” — not assigned to active projects — for prolonged periods.

Layoffs Not Driven by AI: CEO Clarifies

While automation and artificial intelligence (AI) have been reshaping job roles across sectors, TCS CEO K. Krithivasan has clarified that the layoffs were not a direct consequence of AI adoption.

“The decision is not driven by AI taking over jobs,” Krithivasan said in a recent media statement. “We have been retraining our staff, but some roles could not be realigned to current client requirements and evolving tech needs.”

He added that the affected employees had remained unassigned for extended durations and that the company could no longer justify their retention under current market constraints.

What Prompted the Decision?

Several factors led to this unprecedented move:

• Global economic slowdown and shrinking IT budgets across major clients in the US and Europe.
• A shift in client demand toward cloud, AI, and cybersecurity services, leaving older skillsets redundant.
• A tightening of TCS’s internal policies regarding workforce productivity and utilization.

Earlier this year, TCS introduced a new rule requiring employees to achieve at least 225 billable days per year. Those failing to meet this threshold risk facing termination. The company claims the affected employees fall into this category.

Industry Shockwaves and Comparisons

This large-scale downsizing is being seen as a watershed moment for the Indian IT industry. Former Tech Mahindra CEO CP Gurnani likened the event to the end of the “Sholay era” of Indian IT, where having a large bench was a symbol of strength.

“Gone are the days when having excess manpower was a strategic cushion. Clients today demand agility and value,” Gurnani remarked. Experts suggest that other IT giants may follow suit, particularly as automation and AI reduce the need for large teams in routine operations.

Support and Severance Packages

To soften the blow, TCS has announced support measures for impacted employees. These include:

• Full salary for the notice period
• Severance benefits based on tenure
• Extended insurance coverage
• Outplacement services and career counseling

“We are committed to handling this process with empathy and care,” a TCS spokesperson said.

Backlash from Employees and Unions

Despite the support packages, the move has sparked outrage among several employees and unions. Many claim that they were forced to resign abruptly and without prior notice.

The National Information Technology Employees Senate (NITES) has written to the Labour Ministry, calling the layoffs unlawful and unethical. NITES has demanded that the government intervene and halt all terminations until an official inquiry is completed.

“This is a blatant violation of employee rights,” said NITES president Harpreet Saluja. “We urge the Labour Ministry to take strict action.”

Government Seeks Explanation

The Ministry of Labour and Employment has reportedly sought a detailed explanation from TCS regarding the layoffs and employee complaints. The IT Ministry is also monitoring the situation closely amid fears of a larger trend of job cuts across the sector.

Opposition leaders have termed the layoffs as a “jobs crisis” and demanded policy safeguards for tech workers.

What Lies Ahead?

As the tech industry evolves, experts believe this development is a wake-up call for both companies and employees. There is an urgent need to:

• Invest in reskilling and upskilling for future-ready technologies
• Adopt transparent workforce policies
• Prepare for agile, project-based employment models

Employees, especially in middle management, are being urged to focus on AI, cloud computing, DevOps, and other high-demand skills to stay competitive.

Conclusion

The TCS layoffs mark a turning point for India’s IT sector, reflecting the harsh realities of a fast-changing digital economy. While the company insists that this is a strategic move to align with future business needs, it also raises serious concerns about job security, employee treatment, and the role of regulation in a technology-driven employment landscape.

For now, over 12,000 employees face uncertainty, and the industry watches closely to see if this signals the beginning of a broader correction—or merely a harsh but isolated storm.