The decision by Tata Consultancy Services to lay off 12,261 workers, or around 2% of the workforce, would mostly affect middle- and senior-level staff.
AI vs Jobs? TCS CEO Breaks Silence on 12,000 Layoffs Amid Automation Push
About 2%, or 12,261 workers, of the worldwide workforce of India’s largest IT services company, Tata Consultancy Services (TCS), will be let go this year. TCS CEO K Krithivasan described the decision as a “hard but necessary reckoning” in an interview with MoneyControl. Additionally, Krithivasan denied that artificial intelligence (AI) was the cause of the employment losses.
Artificial Intelligence Behind TCS Layoffs? CEO K Krithivasan Addresses 12,000 Job Cuts
“AI’s 20% productivity gains are not the reason for this,” Krithivasan told Moneycontrol.
He said, “This is motivated by situations where there is a skill mismatch or where we believe we have not been able to deploy someone.”
“The layoffs will be implemented gradually over FY26 and will not be tied to any particular geography or domain,” Krithivasan told Moneycontrol. He declared, “We will do it in a very, very compassionate way.”
However, the corporation partially blamed AI for the decision in its statement announcing the change, which would mostly affect middle- and senior-level staff.
“TCS is working to build an organization that is prepared for the future. This covers a number of strategic goals, such as investing in new technology, breaking into new markets, using AI on a large scale for both ourselves and our clients, strengthening our alliances, developing next-generation infrastructure, and reorienting our workforce model.
“Several reskilling and redeployment programs have been under progress in order to achieve this. We will also be releasing associates from the organization whose deployment may not be possible as part of this journey. Over the course of the year, this will affect roughly 2% of our global workforce, mostly in the middle and senior grades,” it stated.
30 months after ChatGPT’s launch, the move
According to HT, the TCS layoffs occur 30 months after ChatGPT’s launch threatened the viability of India’s IT behemoths’ business models, which depend on hordes of programmers. Two weeks ago, HCL Technologies Ltd., the third-largest provider of IT services in India, warned of possible layoffs as automation replaces graduate-level labor.
“In a competitive market where customers are demanding 20-30% price reductions on deals, the impact of AI is eating away at the people-heavy services model and forcing the large service providers like TCS to rebalance their workforces to maintain their profit margins and stay price competitive,” Phil Fersht, CEO of HFS Research, told HT.
“This trend will last for about a year as the leading providers are forced to move on people who will struggle to align with the new AI model we call services-as-software and focus on training junior talent to work with AI solutions,” Fersht added.
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