India’s largest IT services provider Tata Consultancy Services will reduce its workforce by 2% in its 2026 financial year, primarily affecting middle and senior management, the company said on Sunday.
The move will eliminate roughly 12,200 jobs from the company’s workforce of more than 613,000 as TCS deploys AI and other technologies while entering new markets and contending with an uncertain demand outlook.
“This transition is being planned with due care to ensure there is no impact on service delivery to our clients,” the company’s statement said.
India’s $283 billion IT sector has had to contend with clients holding back non-essential technology spending because of weak demand, persistent inflation and lingering uncertainty over U.S. trade policies.
TCS Chief Executive K Krithivasan said this month that there were delays in client decision-making and project starts.
Phil Fersht, CEO of IT advisory firm HFS Research, said that the impact of AI is eating into the people-heavy services model in the sector.
“(That model) is forcing large service providers such as TCS to rebalance their workforces to maintain profit margins and stay price-competitive in a cut-throat market where clients are demanding 20-30% price reductions,” Fersht said.
The decision by TCS, considering its culture of being a stable place to work, highlights this sectoral trend, he added.
(Reporting by Haripriya SureshEditing by David Goodman)
