India’s largest IT company is saying that it’s laying off 12,000 employees because the ways of working are changing.
TCS has said that it will lay off 2 percent of its workforce over the next year to become more agile and future-ready amid rapid disruptions in technology. TCS has 6.13 lakh global employees, which means that the company will let go of nearly 12,000 employees in the coming financial year, from April 2025 to March 2026.
“We have been calling out new technologies, particularly AI and operating model changes,” TCS CEO K Krithivasan told Moneycontrol. “The ways of working are changing. We need to be future-ready and agile. We have been deploying AI at scale and evaluating skills we will be requiring for the future. We have invested a lot in associates in terms of how we can provide them with career growth and deployment opportunities. Still, we find that there are roles where redeployment has not been effective. This will impact roughly 2 percent of our global workforce, primarily at middle and senior levels. It has not been an easy decision and one of the toughest decisions I have had to take as CEO,” he added.
Krithivasan said that the decision hadn’t been caused by AI, but to “address skills” for the future. “This is not because of AI but to address skills for the future. This is about feasibility in deployment not because we need less people,” he said.
“It’s a difficult call we have to take to build a stronger TCS”, Krithivasan added. He said that apart from notice period pay and an added severance package, TCS will also look to extend insurance benefits and offer outplacement opportunities for the impacted employees.
While TCS is saying that the job cuts aren’t because of AI, it does concede that it’s heavily using AI in its operations, and says that “ways of working are changing”. Other tech companies have been more upfront about how AI is impacting job requirements. Inmobi has said that 80% the coding at the company will be automated by the end of the year, which will mean that employees will lose jobs. Internationally, Salesforce has said that it has stopped hiring software engineers this year because of the productivity gains it’s seeing from AI, and Klarna had earlier said that it had stopped hiring humans entirely. Shopify has said that teams asking for more human headcount will have to first prove that the roles they’re looking for can’t be automated by AI.
Amid all this, it’s not surprising that IT giants are looking to scale back on their human workforce. AI has impacted many fields, but nowhere has the impact been as great as in programming. An AI coding agent recently beat all but one of competitive human programmers, and OpenAI CEO Sam Altman says that an AI will be the world’s best programmer by the end of 2025. AI can now write entire sections of code by itself, and professional coders can grow their productivity multifold by using it. Also, there are platforms like Lovable which have popped up, which can create entire websites and apps with just instructions in plain English. And while TCS might say that the job losses aren’t caused by AI, it’s hard to imagine how a company which writes code as its primary function can’t be changing how it works with the advent of this new technology.