Tata Consultancy Services (TCS), India’s largest IT services exporter, on Tuesday declared layoffs of almost 20,000 employees in the September quarter of 2025.
This is the largest layoff ever in the company’s history, lowering its staff count to approximately 590,000. According to the firm, the main factors driving this decision were planned workforce rebalancing, performance-driven exits, and, consequently, a decrease in bench policy for new hires.
The manpower cuts have a cost implication of Rs 1,135 crore, primarily because of severance payments. Junior staff members will continue to get 100% of their Quarterly Variable Allowance (QVA) for the Q2 FY26 quarter.
Middle-level staff in grades C, C1, and C2 will also receive full variable compensation. For higher-level staff in grade C3A and higher, payments will be based on business unit and company performance.
In the midst of layoffs, TCS is investing heavily in artificial intelligence. The company plans to develop a 1-gigawatt AI data center in India within five to seven years, a project valued at approximately $6.5 billion.
The project will enhance TCS's capabilities and data infrastructure in AI, positioning the company as a global leader in AI-based technology services.
Also Read: TCS Layoffs: Forced Resignations and ‘Fluidity List’ Spark Fear Among Employees
TCS is doubling down on AI capabilities despite the downsizing. The company already has 160,000 AI-trained personnel and hired 18,500 new employees in Q2, specializing in future-ready technologies.
The strategic march towards artificial intelligence aims to make TCS an AI-first company and the world’s largest AI-led tech services provider.
TCS’s continuous reduction in its workforce and massive spending on AI highlight the dilemma of weighing cost control against innovation, as India’s IT behemoth rides a fast-changing tech wave.