In an era when artificial intelligence (AI) is changing industries and office layouts at a rapid pace, it’s simple to imagine that layoffs in major technology firms are being fuelled by automation. But when Tata Consultancy Services (TCS), India’s largest IT services company, recently said it would eliminate around 12,000 jobs by FY26, the motive wasn’t what everyone anticipated.
In an honest interview with Money-control, TCS CEO K. Krithivasan provided an honest and refreshingly human view. “It’s not AI,” he said, and explained that this choice was a result of skills imbalance and deployment feasibility and not a takeover by tech.
A Difficult Decision, Not Taken lightly
The layoffs will impact almost 2% of TCS’s worldwide strength of more than 600,000 employees. The majority of the impacted jobs are reported to be in the middle and senior management positions. Although the figures may look big, the CEO explained that this is not a panic decision or one resulting from abrupt changes in technology.
Krithivasan referred to it as “one of the toughest calls” he has made as a leader. And it was more than just a corporate restructuring plan—it was a realignment forced by evolving business needs and talent capabilities.
“this is motivated by where there is a skills mismatch, or where we feel we have not been able to utilise someone effectively,” he said. Notably, the firm underlined that the shift has nothing to do with AI-fuelled productivity benefits.
Why AI Is Not the Culprit?
In a time full of AI killing jobs headlines, TCS’s action is a standout. The organization is heavily engaged in AI-driven initiatives, and it’s upskilling its employees in new tech. But as Krithivasan strongly emphasized, “This is not because of AI giving us some 20% productivity gains. We are not doing that.”
Rather, he emphasized a practical challenge: even with training, there are some jobs that just don’t fit in the company’s shifting puzzle. It’s a matter of rethinking the puzzle pieces so that each fits into the larger strategy.
The Real Challenge: Redeployment and Skill Gaps
TCS has been actively redeploying employees. In fact, about 550,000 employees have received basic digital skills training, and more than 100,000 in emerging technologies. Still, not everyone is redeployable at a click.
As technologies change, so do clients’ needs. Certain jobs are made obsolete not because they’re no longer of use worldwide, but because they don’t fit with the services and delivery models that clients are currently asking for. TCS’s international clients increasingly need a mix of tech savvy, flexibility, and specialized expertise.
Not all employees—even older employees—are as versatile in quickly filling these newer roles.
No Connection to Profit Margins or Cost Reduction
In an industry where firms typically cut staff to drive quarterly results, TCS’s action is unusual. The CEO was emphatic: “The motivation is not margins.”
This isn’t cost-cutting for profit enhancement—it’s readying the organization for the future. By ensuring that every member of its teams is committed to its vision and potential, TCS aims to be nimbler and more responsive in the midst of continuous technological evolution.
This philosophy reflects a long-term commitment, not a short-term fix.
Support and Sensitivity: Not Just Numbers on a Spreadsheet
Perhaps the most comforting aspect of this development is TCS’s approach to its outgoing employees. The company isn’t letting go of people and walking away.
The affected employees will be given decent severance benefits, complete notice-period pay, extended health coverage, and even career guidance. In most situations, a further three-month payment is in the works. TCS has also agreed to enable affected personnel to pursue alternative employment opportunities and access upskilling facilities, if sought.
All this tenderness shows that the company is aware of the human cost of big decisions.
Looking Ahead: Reshaping for Resilience
In spite of the layoff announcement, TCS is optimistic and future-focused. The company is expanding its presence in newer markets and its bets on high-value offerings, such as AI adoption, cloud computing, cybersecurity, and enterprise transformation.
Its recruitment strategy is also in the process of being altered. Rather than recruiting solely on the basis of experience or length of service, the new focus will be on flexibility, skill multiplicity, and openness to change. It is a message not only to existing employees, but also to prospective ones.
Layoffs are never pleasant, for neither the company nor for the impacted individuals. Yet, TCS’s open handling, transparent communication, and human-centric messaging bring a glimmer of hope amidst challenging transformations.
The thing that jumps out, though, is the candor: rather than pretending to hide behind terms like AI or automation, the firm is acknowledging that certain skills just don’t fit their vision for the future—and that’s all right. Growth mandates tough decisions, and this seems to be one of them.
TCS is not abandoning its employees. It’s getting them—and itself—ready for a brighter, faster, and more resilient tomorrow.
