TCS is set to lay off 12,000 employees in FY26, driven by rapid technological advancements, skill gaps, and the growing influence of AI. The company’s updated bench and billability policies are tightening workforce deployment. Discover how this major restructuring is affecting employees and why adapting to future-ready skills is more crucial than ever.
Tata Consultancy Services (TCS) is set to reduce its global workforce by approximately 2%, affecting nearly 12,000 employees. The layoffs will span multiple roles, departments, and geographic locations, and will be implemented gradually throughout the financial year 2026.
TCS Layoffs: A Major Shift to Align with Emerging Tech Trends
The Goal
Tata Consultancy Services (TCS) aims to reshape its workforce to better align with evolving technological trends. The company is adapting to rapid changes such as artificial intelligence (AI), automation, and new project delivery models. This move has been in the making for a while—but its scale signals a major transformation
The Impact of AI and the Evolving Skill Landscape
TCS emphasizes that these layoffs are not simply about AI replacing human jobs. Instead, they reflect the need to align talent with future business requirements.
The reality is that many current roles no longer match the demands of the changing tech landscape. New skills are in demand, and the company needs a workforce that is ready for what lies ahead.
Leadership highlights three main reasons for this shift:
- The rapid rise of AI
- Changes in how clients operate
- Evolution in project delivery models
Modern projects are now shorter and handled by leaner teams. Traditional roles like manual testing are becoming obsolete. Clients expect faster results, higher precision, and AI-based solutions.
Mid- and Senior-Level Roles Affected Most
The majority of job cuts will impact mid- and senior-level employees. These are typically positions where internal redeployment efforts have not been successful. Although TCS offered upskilling and alternate growth paths, not all transitions worked out. As a result, roles that no longer align with the company’s long-term strategy are being phased out. In such cases, exits are being processed with severance packages and support to ease the transition.
New Bench and Billability Rules Introduced
TCS has also revised its bench policy to tighten deployment standards. Key changes include:
- A minimum of 225 billable days per year is now mandatory
- An employee cannot remain on the bench for more than 35 days annually
Failing to meet these targets may result in disciplinary action—including termination in some cases.
Employees are now expected to proactively reach out to project teams, and the Resource Management Group (RMG) is closely monitoring compliance.
Severance and Support for Affected Employees
Employees who are being let go are being offered compensation packages. These include:
- Notice period pay
- Extended health insurance
- Outplacement assistance
TCS states that the goal is to handle the layoffs with dignity, fairness, and transparency.
However, some employees have expressed dissatisfaction. Reports indicate that a few were asked to resign abruptly with short notice. In certain cases, those who declined were allegedly warned about the consequences, including losing severance benefits.
Hiring delays and slowdowns
The restructuring goes beyond layoffs. TCS has also paused onboarding for at least 500 lateral hires. These offers had been made months ago. Joining dates are now delayed until further notice. TCS leadership notes that client decisions have slowed. Projects are not being cancelled but delayed. This, in turn, affects staffing and onboarding timelines.