Tata Consultancy Services (TCS), one of India’s largest IT multinational corporations, is in the spotlight once again due to significant developments. The company recently revealed its quarterly results, disclosing costs amounting to Rs 1,135 crore incurred from layoffs and restructuring. Despite these substantial expenses, TCS reported a consolidated net profit of Rs 12,075 crore, although its revenue of Rs 65,799 crore for the second quarter fell slightly short of analyst expectations.
In this fiscal year, TCS plans to lay off approximately 12,000 employees, roughly 2% of its workforce, primarily from mid and senior levels. The costs associated with these layoffs, including severance and advance salary payments, contributed to the Rs 1,135 crore expenditure. TCS has positioned this move as part of a larger strategy aimed at becoming a “future-ready organization,” which includes investments in technology, artificial intelligence, and market expansion, with workforce realignment occurring throughout the year.
Reports from IT union representatives indicate that the actual number of layoffs may be far higher than stated. They claim that many employees were encouraged to resign voluntarily to keep official numbers low, although TCS has dismissed these allegations as unfounded. During an analyst call, TCS Chief Human Resources Officer, Sudeep Kunnumal, clarified that the company has let go of about 1% of its workforce due to mismatches in skills and capabilities. He assured that impacted employees are receiving benefits, counseling, and severance considerably above industry standards.
Moreover, TCS’s total workforce has decreased by around 20,000 in the September quarter, marking its largest reduction to date and exceeding analysts’ predictions. This decline has been attributed to a combination of planned layoffs, performance-related departures, and adjustments related to new hiring policies. In the meantime, TCS has announced a dividend of Rs 11 per share, with the record date set for October 15 and payments scheduled for November 4. CEO K. Krithivasan expressed gratitude to employees for their dedication and emphasized the company’s ambition to evolve into the world’s foremost AI-driven technology services provider.
The ongoing workforce reductions will continue throughout the year as TCS strives for bold transformation across various areas, including talent management, infrastructure development, and partnerships. Announcements have also been made regarding strategic investments in a new entity to create a world-class AI infrastructure, including a proposed 1 GW capacity AI data center in India.
Original Source: https://www.india.com/business/bad-news-for-ratan-tatas-tcs-faces-major-loss-due-to-layoffs-spends-rs-11350000000-in-restructuring-charges-severance-costs-reduced-12000-employees-plans-workforce-reduction-throughout-year-8124482/
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Publish Date: 2025-10-10 08:27:00
