Tata Consultancy Services (TCS), India’s largest IT services firm, has reported a significant reduction in its workforce, bringing its headcount below 600,000 for the first time in several years.
As of the September 2025 quarter (Q2 FY26), TCS employed 593,314 individuals, marking a decline of 19,755 employees from the previous quarter.
This reduction is attributed to a combination of planned layoffs, performance-based exits, and policy changes affecting newly hired employees.
The company incurred a one-time severance cost of ₹1,135 crore during this period. Reflecting the financial impact of the workforce restructuring.
TCS’s Chief Human Resources Officer, Sudeep Kunnumal, clarified about 6,000 employees, or about 1% of the workforce, were released as part of the restructuring efforts.
He dismissed rumors suggesting that 50,000 to 80,000 employees were laid off, labeling such figures as “extremely exaggerated”.
Despite the workforce reduction, TCS reported a 1.4% year-on-year increase in net profit for Q2 FY26, amounting to ₹12,075 crore.
However, the company experienced a 5.4% quarter-on-quarter decline in net profit, primarily due to the severance payouts.
The layoffs have sparked criticism from labor unions, particularly the Nascent Information Technology Employees Senate (NITES), which has accused TCS of downplaying the scale of the job cuts.
NITES claims that the company’s official figures do not accurately reflect the extent of the layoffs, raising concerns about transparency in the reporting process.
Looking ahead, TCS has indicated that the workforce rationalization process will continue throughout the year, although no specific targets for further reductions have been set.
The company aims to align its workforce with the evolving demands of the IT industry, focusing on areas such as artificial intelligence and digital transformation.
This strategic shift underscores the broader trend within the IT sector towards adopting new technologies and optimizing organizational structures to remain competitive.
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