TCS Signals More Job Cuts in 2026 as Workforce Shrinks by 30,000 in Six Months
TCS says job cuts will continue into 2026 as restructuring, falling headcount and stricter office rules fuel employee anxiety.
Tata Consultancy Services (TCS), India’s largest IT services company, has confirmed that employee exits linked to its ongoing restructuring will continue into 2026, extending a period of uncertainty for thousands of workers across the organisation. The announcement came after the company released its Q3 earnings, revealing that its workforce has shrunk sharply over the past two quarters.
In 2025, TCS began a broad restructuring exercise that it said was driven by changing business needs and the growing role of automation and artificial intelligence in project delivery. That exercise has already led to significant job losses. Over the last six months alone, the company has seen its total headcount fall by around 30,000 employees.
After announcing its latest quarterly results, TCS made it clear that this process is not yet complete. The company said employee exits will continue in the next quarter as well, though it stressed that it is not working towards a fixed number. According to TCS, every termination is backed by a valid reason and carried out through a defined internal process, even as the overall workforce continues to decline.
This statement is likely to increase anxiety among employees, many of whom are already dealing with tighter work-from-office rules and delays in appraisals.
No number-driven layoffs, says TCS
According to MoneyControl, TCS chief human resources officer Sudeep Kunnumal told analysts that the company let go of around 1,800 employees during the October–December quarter. This figure, however, appears much lower than what is reflected in TCS’s own quarterly fact sheet.
The fact sheet shows that TCS’s total employee count fell by a little over 11,000 between the end of the September quarter and the end of December. This suggests that the reduction in headcount during the quarter was a mix of about 1,800 terminations carried out through internal processes and a much larger number of employees leaving due to natural attrition. Importantly, many of those vacancies were not filled, contributing to the net decline.
Kunnumal said exits may continue into the next quarter as well, but repeated that the company is not chasing a specific target. According to him, exits happen only when there is a clear and genuine reason.
Headcount keeps falling
In the October to December quarter alone, TCS reduced its workforce by 11,151 employees. As a result, the total number of employees fell to 5,82,163 at the end of December, down from 5,93,314 in the previous quarter. This marked the second consecutive quarter of net headcount decline, pushing the company well below the six-lakh employee level.
In the September quarter, TCS had already reported a reduction of 19,755 employees. Taken together, this means that in just six months, the company’s workforce has dropped by around 30,000.
While many have linked these job losses to the rising use of AI tools such as Claude and Cursor, another factor may also be at play. A recent report by Oxford Economics suggests that many of the recent layoffs across the tech sector are not primarily driven by AI, but by efforts to remove under-performers and reduce costs. Companies, the report notes, often cite AI as the reason to manage the messaging around job cuts. However, there is no direct indication that TCS is following this approach.
Office rules add to the pressure
Alongside shrinking headcount, TCS has also tightened its work-from-office policies. Some employees have reportedly seen their final anniversary appraisals put on hold for not meeting attendance requirements. In a few cases, appraisals were completed at the team level but not approved centrally. Internal messages reviewed by the media have warned that continued non-compliance with office attendance rules could even lead to employees missing out on the 2026 performance rating cycle.
Together, the ongoing restructuring, falling workforce numbers and stricter workplace rules have created a tense atmosphere inside one of India’s most influential technology companies.
