TCS trims workforce by 12,000, says AI replacing human roles

August 1, 2025 by News Desk

Tata Consultancy Services (TCS), India’s largest IT services company, has laid off around 12,000 employees so far in 2025, marking one of the most significant workforce reductions in its history.

The layoffs, primarily affecting mid-level and senior employees, come amid a broader wave of restructuring as the company shifts focus towards emerging technologies such as artificial intelligence, cloud computing, and automation.

In addition to the job cuts, TCS has paused fresh recruitment and withheld salary hikes across several bands, including for high-performing employees.

The company attributed these measures to an ongoing realignment aimed at addressing a growing mismatch between the skills currently available within the company and the capabilities needed to serve clients in the rapidly evolving digital landscape.

According to official statements from TCS, the restructuring is part of a strategic effort to optimize operations and future-proof the workforce. “We are focused on building an agile and future-ready organization.

As client priorities shift towards AI, cloud, and data-led services, we are making tough but necessary decisions to stay aligned with that demand,” a company spokesperson said earlier this month.

The decision to freeze salary hikes has caused concern among employees, especially those who met or exceeded their performance targets. Internal sources suggest that the company is recalibrating its compensation model to reward proficiency in newer technologies rather than tenure or legacy performance metrics.

TCS has also significantly slowed down lateral hiring and campus recruitment drives, signaling a cautious approach to expansion.

But TCS is not alone. Several other major companies operating in India have also slashed jobs in 2025. Accenture laid off more than 7,000 employees globally, with a notable portion of the cuts impacting its Indian operations, citing the need to improve operational efficiency amid lower tech spending.

Amazon has downsized some of its workforce in logistics and support functions in India as part of its global cost-cutting efforts. Similarly, Google-parent Alphabet has trimmed its India teams, especially in sales and support roles.

Startups like Byju’s and Swiggy have continued their downsizing trends, with Byju’s reportedly laying off over 3,000 employees this year alone, as it struggles to deal with mounting debt and falling investor confidence.

This wave of layoffs has sent ripples through the Indian job market, particularly within the tech and startup sectors. While automation and AI have not yet directly replaced jobs at scale, they are reshaping how services are delivered and which roles are deemed critical. Companies are moving away from traditional staffing-heavy models to leaner, skills-focused teams.

The developments at TCS and other firms underscore a shift in the Indian job landscape, driven by global economic uncertainty, technological disruption, and changing business models.

While these measures are being framed as strategic realignments, they also point to a growing volatility in industries that were once seen as stable job creators.