Tata Consultancy Services (TCS), India’s largest IT services company, has announced a major workforce restructuring plan, signaling a shift towards aligning its business model with the demands of artificial intelligence (AI). As part of this transition, the company has initiated a series of layoffs, but what sets it apart is the introduction of generous TCS layoffs severance packages aimed at easing the impact on affected employees.
TCS Layoffs and Restructuring
According to recent reports, around 12,000 employees have been impacted by the latest round of layoffs at TCS, which began in July 2025. This accounts for nearly 2% of its global workforce of more than 613,000. The restructuring comes as TCS seeks to streamline its operations, shed redundant roles, and invest more aggressively in AI-driven projects.
The TCS layoffs severance packages are designed to provide financial and career transition support to employees whose roles are no longer relevant. Employees with long tenures are receiving the most extensive benefits, while those who have been unallocated or “on the bench” for extended periods are offered shorter packages.
Details of Severance Packages
As per the company’s severance framework:
- Employees with over 15 years of experience and whose roles are considered redundant may receive up to two years’ salary as severance pay.
- Standard packages include a three-month notice period plus six months to two years of salary, depending on the length of service.
- Employees who have been on the bench for over eight months are entitled only to a basic package, including three months’ notice pay.
- In select cases, early retirement options have also been offered, along with career transition assistance.
Additionally, TCS has promised outplacement services, access to mental health programs, and support through its employee welfare initiative “TCS Cares.”
Comparison with Accenture
The move comes shortly after Accenture announced a similar restructuring program, under which it laid off nearly 12,000 employees in a single quarter. Accenture’s strategy emphasized retraining and AI upskilling, but also included exits for those unable to transition to new roles.
By contrast, TCS has chosen to combine layoffs with robust severance packages, projecting a more employee-focused image while still addressing the changing dynamics of the IT services industry.
Market Reaction and TCS Share Price
Investors are closely watching how these layoffs will impact TCS share price in the coming weeks. While workforce rationalization is expected to improve margins, concerns remain over project execution and potential morale issues.
As of the last trading session, TCS share price remained relatively stable, indicating that the market views the restructuring as a necessary long-term adjustment. Analysts believe the upcoming quarterly results on October 9, 2025, will shed more light on the financial impact of these measures.
Industry Implications
The decision by TCS to introduce structured severance benefits reflects a broader industry trend. With AI automation reshaping client demands, IT companies worldwide are facing pressure to adapt. Roles focused on legacy systems and repetitive processes are increasingly being replaced with positions requiring AI, data science, and cloud expertise.
For employees, this means upskilling is no longer optional but essential for career survival. TCS’s severance program, while generous, underscores the urgency for professionals in the IT sector to invest in continuous learning.
What Lies Ahead for TCS
The restructuring is expected to continue until the end of 2025, with more layoffs likely as business units reassess their staffing needs. TCS has assured that it will complete the process in a phased manner, minimizing disruption for both clients and employees.
While the TCS layoffs severance packages demonstrate a commitment to employee welfare, the company’s long-term focus remains on strengthening its AI and digital transformation capabilities. For shareholders, the key question is whether these changes will boost competitiveness and sustain profitability amid increasing global competition.
The announcement of TCS layoffs severance packages marks a significant moment for India’s IT sector. By providing up to two years of severance pay, TCS is attempting to balance business transformation with employee care. However, as more roles are automated, the restructuring serves as a reminder that even the most established IT firms are not immune to technological disruption.
For now, the spotlight will remain on TCS share price and its upcoming earnings report, which will reveal how effectively the company manages this delicate transition.
Stay updated with more breaking business and startup stories at Startup News.
