Tata Consultancy Services (TCS) has wrapped up its workforce reorganisation with around 8,000 redundancies — about 25% lower than the 12,000 reduction it had guided.
In July 2025, the IT major announced its reorganisation initiative to “become a future-ready organisation”. “As part of this journey, we will also be releasing associates from the organisation whose deployment may not be feasible. This will impact about 2% of our global workforce, primarily in the middle and the senior grades, over the course of the year,” it said. At the time TCS had a workforce of a little over 600,000.
The company incurred restructuring expenses of Rs 1,388 crore in FY26, with the exercise completed in the third quarter. In Q2FY25, 6,000 employees were laid off as part of the exercise and the remaining in Q3. Its management maintained that the exercise involved finding ways to skill existing employees in new-age tech, and only those not found fungible in the reorganised structure were let go.
End of the Bench
Alongside the restructuring, the company is increasingly shifting its hiring approach towards a demand visibility-led model, moving away from its earlier bench-led strategy. This change will also extend to its campus hiring plans. In FY26, the firm onboarded 44,000 freshers. It currently has demand visibility for 25,000 hires. As delivery models evolve to be driven by productivity and outcome rather than headcount, IT firms have seen an increase in utilisation levels, and a scaling down of the bench.
While TCS does not disclose its utilisation levels, its peers have reported the metric to be in the 80-88% range. Industry experts said that TCS’ utilisation would also be in the same range, a significant departure from the 60-70% range that was once considered ideal.
“Most of the IT services companies have a very thin bench, if at all for the past 2 years now. Given the increased focus on revenue generation through AI, many services companies are now hiring workforce that comes with related skills in areas of AI/ML coding, data, cloud or security,” Neeti Sharma, CEO, TeamLease Digital, said
She added that traditional roles like L1 support and testing are declining, while AI, data, and cloud roles are growing. Freshers in AI are also earning a premium, anywhere between Rs 6-12 lakh annually, a 25-30% increase compared to other freshers.
AI Premium
The company added 2,356 employees during the January-March quarter, taking its total headcount to 584,519 at the end of March from 582,163 in the December quarter. This increase came even as attrition levels remained elevated.
Attrition stood at 13.7%, reflecting a rise of 20 basis points on a month-on-month basis. The management has conceded that current attrition levels are higher than TCS’ comfort range of 10-12%, but attributed them to current industry dynamics.
According to people familiar with the matter, hiring during the quarter included backfilling roles that were vacated due to voluntary attrition, as well as onboarding of trainees. The latter accounted for most hires in the period.
Source – https://www.financialexpress.com/business/news/8000-jobs-cut-in-tcs-workforce-reset/4205235/