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TCS Clarifies: No Fixed Layoff Target, Workforce Evaluation to Continue with Careful Approach
TCS says it has no fixed layoff target, focusing instead on continuous employee evaluation and compassionate workforce restructuring amid AI disruptions.
Tata Consultancy Services (TCS) has emphasized that it does not have a predetermined target for workforce reduction, clarifying that the company’s recent decline in headcount is not part of a fixed layoff plan. The clarification came from Sudeep Kunnumal, the company’s Chief Human Resources Officer, during TCS’s September quarter earnings call. His remarks followed growing discussions around layoffs and attrition trends across India’s IT industry.
Kunnumal stated that TCS’s approach to managing its workforce remains flexible and rooted in continuous evaluation rather than numerical goals. “We don’t have a target. We will continue to evaluate everyone after all the investment in learning and development that we’ve done,” he said. He further explained that the company will take a cautious and humane approach when releasing mid and senior-level employees who are unable to find suitable roles that align with their experience and skills.
According to Kunnumal, the company’s 20,000-person reduction in net headcount during the July–September quarter resulted from both voluntary and involuntary attrition. He clarified that this change was a natural outcome of workforce adjustments and not part of a planned downsizing exercise.
Earlier, TCS had reportedly aimed to cut about 2 per cent of its global workforce — approximately 12,000 employees — due to macroeconomic challenges and increased AI adoption across its operations. Nearly half of that projected reduction has already taken place. As of the end of September 2025, TCS’s total headcount stood at 593,314. Attrition in the second quarter of FY25 was reported at 13.3 per cent, up from 12.3 per cent a year ago, though slightly better than the 13.8 per cent recorded in the previous quarter.
Kunnumal also acknowledged that technological shifts and automation are reshaping TCS’s workforce dynamics. The mid and senior-level employees who are finding it difficult to secure relevant assignments have been most affected. He added that benched employees — those currently without billable projects — would likely face more scrutiny in the months ahead. However, he assured that TCS would handle all releases “with a lot of care.”
In an effort to support affected employees, TCS is offering not only severance packages but also counselling and outplacement assistance. “We are providing benefits, counselling, and outplacement support,” Kunnumal said, highlighting that the severance pay offered by TCS is above industry benchmarks. During the September quarter alone, the company spent approximately Rs 1,135 crore on severance payments.
On the business front, TCS reported modest earnings growth for the September quarter amid global economic uncertainty. The IT giant posted a net profit of Rs 12,075 crore, marking a 1.4 per cent year-on-year rise, while revenue from operations grew 2.4 per cent to Rs 65,799 crore. The subdued results reflect the broader challenges faced by the IT services sector as it navigates macroeconomic headwinds and the transformational impact of artificial intelligence.
