TCS to Lay Off 12,000 Employees, Offers Up to 2 Years’ Severance Pay

Tata Consultancy Services (TCS), India’s largest IT services company, has initiated a major workforce restructuring exercise that will impact more than 12,000 employees globally. The decision, which accounts for nearly 2 per cent of its workforce, comes as the company adapts to shifting client demands, rapid automation, and the pressing need for new-age digital skills.

According to a report by Money Control, employees whose skills no longer align with the company’s evolving business priorities are the most affected, with the majority being mid to senior-level professionals. The restructuring process began in August and September this year, with most changes already executed and only a small number of employees currently under review for redeployment.

To support those impacted, TCS is offering some of the most generous severance packages in the Indian IT industry. Employees will receive three months’ notice pay in addition to a severance package ranging between six months and two years’ salary, depending on tenure. Those who have served the company for over 15 years and whose roles have been deemed redundant stand to receive the maximum severance—equivalent to two years’ pay.

In contrast, employees who have been “on the bench” (unallocated to projects) for more than eight months without securing a suitable role will only be entitled to the three months’ notice period pay. For long-serving staff with 10 to 15 years of experience, the package may amount to around 1.5 years of salary.

In a statement to India Today Tech, TCS said, “In keeping with the values of our company, those affected by our recent initiative to realign skills have been provided care and support as is due to them in each of the individual circumstances.”

Beyond financial compensation, the company is extending career transition assistance. Impacted employees will have access to outplacement services, with TCS covering agency fees for up to three months. In select cases, additional support such as mental health counseling through the “TCS Cares” program is being provided. Employees eligible for early retirement are being offered full retirement benefits along with extra severance based on tenure.

TCS CEO K Krithivasan described the move as “one of the toughest decisions” of his career. The leadership has emphasized that while the layoffs are difficult, they are necessary to ensure the company remains agile in an intensely competitive and fast-changing technology environment.

The Resource Management Group (RMG) is also playing a role in helping employees explore alternate project opportunities within TCS before severance takes effect. However, for many, especially those in traditional roles that have been automated or phased out, redeployment options remain limited.

The announcement has had an immediate impact on market sentiment, with TCS shares dropping 0.94 per cent to Rs 2,932.50 in Friday trading. Tech Mahindra also witnessed a decline of 1.03 per cent to Rs 1,429.05.

With the IT sector undergoing rapid transformation, TCS’s restructuring underscores the larger reality facing technology companies: the future belongs to those who continuously adapt and upskill.