CEO K Krithivasan explained in a recent media interview that the decision is part of a strategic shift to make TCS 'more agile and future-ready'. Krithivasan emphasized that the layoffs are driven not directly by AI but by the need to align skills with future demands, noting challenges in redeploying certain staff despite significant investments in upskilling.

The company currently employs around 613,000 people globally as of June 2025.

The CEO also clarified that affected employees would receive severance packages, notice period pay, extended health insurance, and outplacement support. Additionally, TCS is instituting stricter bench management policies to encourage timely redeployment of unassigned associates to client projects.

Market analysts observe that AI and automation are quietly reshaping demand in the IT industry, with senior employees facing challenges keeping pace with new technologies, a trend not unique to TCS but prevalent across major corporates.

TCS is a digital transformation and technology partner of choice for industry-leading organizations worldwide. The IT major reported a 4.38% jump in consolidated net profit to Rs 12,760 crore despite 1.62% decline in revenue from operations to Rs 63,437 crore in Q1 June 2025 over Q4 March 2025. The company’s total contract value (TCV) dropped to $9.4 billion in Q1 June 2025, down 22.95% compared with $12.2 billion in Q4 March 2025. Additionally, the attrition rate was at 13.8% for the last twelve months (LTM), the highest in nearly two years.