Citing delayed projects, AI-driven changes, and macroeconomic pressure, TCS tightens its workforce strategy, potentially eliminating 12,000 positions.

The Economic Times reported on 29th July, 2025, that Tata Consultancy Services (TCS), India's largest software service exporter. May halt yearly pay increases and halt the employment of seasoned personnel worldwide. The action was taken soon after the corporation allegedly announced plans to fire 12,000 workers, or around 2% of its staff worldwide.

The corporation has also tightened its internal rules for bench staff, or those not actively deployed on billable customer projects, according to The Economic Times, which cited people familiar with internal events. This is a significant change from TCS's formerly more flexible redeployment strategy, since these workers will now have a 35-day window to locate a project or leave the business. According to the report, important delivery centers like Hyderabad, Pune, Chennai, and Kolkata have already started the process of getting rid of benched staff.

This change in policy reflects the company's attempts to optimize costs as a result of macroeconomic uncertainties and slowdowns in global commerce. Internal communications have brought attention to lateral hire onboarding delays that surpass 65 days, which makes talent planning more cautious. TCS CEO K. Krithivasan has acknowledged the need to adjust to changing customer expectations, even though the company has not announced layoffs or a hiring freeze. He discussed adjusting the operational model in light of slower transaction ramp-ups and heightened customer monitoring during the June-quarter results call. TCS highlighted difficulties from delayed project commencement and margin pressure despite reporting a 9.4% year-over-year increase in consolidated net profit in Q1 FY26.

TCS's stock has underperformed most of its rivals in the Nifty IT index, down about 12% in the last month, 25% so far this year, and roughly 30% from its 52-week peak. Investor worries about the company's expansion and capacity to handle human resources in the face of a changing technology environment are reflected in this fall. With recruiting in the Indian tech sector sharply down in FY25 and shifting increasingly into junior-level roles, gig labor, and outcome-based employment, the larger IT services sector is slowing down. Additionally, generative AI is forcing IT companies to reconsider how they allocate their resources and productivity frameworks.