TCS Announces Major Restructuring: Who Will Be Affected and What’s Next

India’s largest IT services company, Tata Consultancy Services (TCS), has started one of its most significant workforce realignments in recent years. According to a report by a news agency, the company has begun reducing its global workforce and is offering severance packages of up to two years’ salary to employees whose skills are no longer aligned with the company’s evolving business needs.

This restructuring move — affecting around 2% of TCS’s global workforce, or more than 12,000 employees — is part of the IT giant’s broader plan to stay competitive amid rapid automation, shifting client requirements, and emerging technologies such as AI and cloud computing.

Why TCS is restructuring its workforce

Changing client demands and skill realignment

As Tata Consultancy Services (TCS) adapts to a fast-changing technology landscape, it is reassessing roles that no longer align with its digital-first strategy. Many impacted employees are mid- to senior-level staff who have not upskilled in recent years to meet new client expectations in areas like AI integration, cloud transformation, and data analytics.

Sources close to the company suggest that this move aims to streamline operations, enhance agility, and ensure that TCS remains future-ready amid intensifying competition from both domestic and global IT firms.

Severance details: Up to two years of pay for affected employees

Three-month notice plus extended severance packages

Employees impacted by this restructuring will receive a notice period pay of three months, followed by severance compensation ranging from six months to two years’ salary, depending on their years of service.

“The lowest severance pay in this category is 6 months,” a source close to TCS told a news agency.

Those who have been unallocated or ‘on the bench’ for over eight months without finding a suitable project or role within the company will receive only the notice period pay as part of their exit package.

Additional benefits for long-serving employees

Employees who have served 10–15 years at TCS could receive up to 1.5 years’ pay, while those with over 15 years of experience and whose roles have become redundant may be eligible for two years of severance.

TCS is also taking measures to support these employees through the transition. The company is offering career transition assistance, including outplacement services and coverage of agency fees for three months. In select cases, employees can access mental health and counseling support via the company’s “TCS Cares” program.

In its statement to India Today Tech, TCS said, “In keeping with the values of our company, those affected by our recent initiative to realign skills have been provided care and support as is due to them in each of the individual circumstances.”

TCS offers early retirement option with full benefits

Voluntary retirement for eligible employees

TCS has also rolled out an early retirement scheme for employees who qualify, providing them with full retirement benefits along with additional severance pay based on their tenure. This approach is part of the company’s strategy to balance cost efficiency with humane employee management, ensuring a smooth transition for those leaving the organization.

Internal redeployment efforts continue

Resource Management Group helping redeploy employees

While most of the workforce changes took place in August and September, a small number of employees are still being evaluated for alternative roles. Those without an ongoing assignment have been advised to work with the Resource Management Group (RMG) — a dedicated team within TCS that helps match employees to new projects and departments across geographies.

TCS CEO K Krithivasan earlier described the restructuring as “one of the toughest decisions” of his career, emphasizing that such changes are essential to maintain long-term growth and operational agility.

Industry context: IT sector faces global headwinds

The move comes at a time when India’s IT industry is navigating sluggish global demand, rising inflation in key markets like the U.S. and Europe, and a growing focus on AI-driven automation.

Major players like Infosys, Wipro, and HCLTech have also slowed hiring and focused on reskilling initiatives to prepare employees for emerging technologies. TCS’s decision reflects a broader trend of realignment across the IT sector, as companies balance cost optimization with technological evolution.

Conclusion: A difficult but strategic step toward future readiness

TCS’s decision to cut over 12,000 jobs underscores the transformational shift sweeping through the global technology sector. While the layoffs mark one of the company’s biggest workforce changes in years, its generous severance packages, early retirement options, and transition support suggest a balanced approach between business needs and employee welfare.

As the IT giant continues to invest in AI, cloud, and digital solutions, it is clear that adaptability, continuous learning, and reskilling will define the future of work — not just at TCS but across the entire tech ecosystem.