Mumbai, July 28 – India’s largest IT services company, Tata Consultancy Services (TCS), has announced plans to cut 12,261 positions in the financial year 2025-26 (FY26), triggering panic in the IT sector and causing a sharp fall in its share price. The layoffs will primarily affect employees in middle and senior management roles.
As of 30 June 2025, TCS had a total workforce of 6,13,069, with 5,000 new employees added during the April–June quarter.
Stock Market Reaction and Share Performance
On Monday, TCS shares fell by nearly 2% in early trading, becoming one of the worst performers in the Nifty IT Index. The company’s announcement of a 2% reduction in its global workforce led to a negative reaction across the IT sector.
TCS stock slipped to ₹3,081.20 on the BSE, a 1.69% drop. Shares of Infosys and Wipro also declined by over 1%, pulling the Nifty IT Index down by 1.6%. By 9:40 AM, TCS shares were trading at ₹3,095.25.
Why Is TCS Laying Off So Many Employees?
The planned layoffs for FY26, affecting 12,261 positions, are not due to a lack of work, according to TCS CEO K. Krithivasan. He explained that the reason is a mismatch in employee skills and deployment challenges.
Speaking to Moneycontrol, Krithivasan clarified, “We will continue to hire and train qualified talent. This is more about the practicality of deployment.” He said this move is part of TCS’s strategy to become a “future-ready organisation,” with a focus on AI and market expansion.
Changes to Bench Policy
TCS recently revised its “bench policy,” which applies to employees without active projects. Under the new policy, employees must complete at least 225 billable days in a year, and bench time should not exceed 35 days.
Attrition Rate and HR Concerns
The company’s attrition rate increased to 13.8% by June 2025, up from 13.3% in the previous quarter. TCS CFO flagged this as a “concerning level,” stressing the need to retain top talent in the company.
Q1 FY26 Results
In the first quarter of FY26, TCS reported a 4.38% increase in net profit, reaching ₹12,760 crore compared to the previous quarter. However, revenue declined by 1.6% to ₹63,437 crore.
TCS Share Performance Worries Investors
TCS shares have underperformed the broader market over various timeframes:
Past 1 month: down 10%
Past 6 months: down over 23%
Past 1 year: down 30%
Past 5 years: only 33% return
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.
