In one of the most significant headcount reductions in India’s tech sector, Tata Consultancy Services (TCS) has cut nearly 20,000 jobs in just three months, its steepest workforce decline ever. The move reflects rising pressure from automation, evolving business models, and geopolitical uncertainties clouding the global IT services landscape.

As per the company’s financial disclosures for the quarter ending September 30, 2025, TCS’s total employee count dropped to 5,93,314 down from 6,13,069 at the end of June, a net loss of 19,755 workers. This marks the first time since 2022 that the IT major’s workforce has fallen below the 6 lakh mark.

“Skill Mismatch” Behind Layoffs, Says HR Chief

A significant portion of the layoffs targeted mid-level and senior employees, as part of a restructuring strategy aimed at aligning the company with future-ready technologies. Sudeep Kunnumal, the newly appointed Chief Human Resources Officer, commented during an investor call, “The 20,000 headcount (reduction) is a factor of voluntary and involuntary attrition.”
He added that around 6,000 of these were involuntary exits. TCS, according to him, is halfway through a broader plan to trim 2% of its global workforce by March 2026.

Cost of Restructuring Reaches Rs 1,135 Crore

The company has earmarked Rs 1,135 crore to cover severance payouts and other restructuring-related expenses for the quarter. Analysts believe this underlines the scale and seriousness of the transition, as TCS pivots from legacy outsourcing models to high-value digital and AI-led services.

This sharp reduction also exceeded previous projections. While TCS had earlier estimated a cut of 12,000 employees as part of a phased reshaping, the final figure turned out to be 66% higher.

Layoffs Come Amid Global Headwinds and Client Caution

The workforce shake-up is unfolding in a challenging global environment. Slowing demand for traditional IT services, cautious tech budgets, and increased automation are forcing IT giants to re-evaluate long-standing practices. In addition, global uncertainties particularly between the US and India are amplifying concerns.

Proposed U.S. policy changes, including a plan to hike H-1B visa fees to $100,000 and impose new tariffs on Indian imports, have rattled the Indian IT industry. While TCS may not face direct tariff hits, its heavy reliance on U.S. clients leaves it exposed to changing policies and spending patterns.

NITES Alleges Undisclosed Layoff Numbers

Adding fuel to the fire, the Nascent Information Technology Employees Senate (NITES) has accused TCS of not being transparent about the scale of the layoffs. In a statement cited by PTI, NITES said, “This is not a minor difference. Nearly 8,000 employees, more than what TCS admitted, have disappeared from the rolls… It points to a deliberate attempt to downplay the scale of retrenchments and mislead regulators, policymakers, and the public.”

They further added that the company’s continued revenue growth during the same period invalidates any justification based on performance.

“TCS may present these job cuts as numbers on a balance sheet, but for us they are stories of shattered lives,” NITES said.

Attrition Rate Drops, But Fresh Hiring Stalls

While the company saw a dip in its voluntary attrition rate down from 13.8% in Q1 to 13.3% in Q2 of FY26 the steep job cuts have overshadowed this figure. Additionally, the proportion of women in the workforce inched up to 35.2%, slightly higher than the 35.1% reported in the previous quarter.

TCS has remained quiet about campus hiring plans for the year, a silence that has sparked speculation about a broader hiring freeze across the industry.

Industry-Wide Trend: Silent Layoffs and Automation

TCS is not alone in navigating this shift. Across India’s $280 billion IT sector, a wave of what experts call “silent layoffs” is underway where employees are eased out without formal announcements. These may involve not renewing contracts, removing staff from projects, or simply sidelining them until they resign.

Many of those affected are mid-career professionals whose roles have become redundant due to automation and changing client demands. Industry watchers estimate that as many as 50,000 IT workers could lose their jobs by the end of 2025.

Labour advocates are sounding the alarm, calling for better protections and transparency. They argue that this opaque way of restructuring leaves employees with little recourse.