Athira Sethu
Kochi, 10 October 2025
Tata Consultancy Services (TCS) announced that it had 593,314 employees at the end of the second quarter of the financial year 2026 (Q2FY26), 19,755 fewer employees than in the previous quarter. The headcount was up by 5,090 in Q1. After the July announcement of a cut in the workforce by about 12,260 employees, the second-quarter reduction in headcount marks the company’s largest layoff and a significant winding down of TCS’s restructuring program.
With this decrease, the reduction in employee numbers is the biggest drop for TCS in the past several years, with the last major layoff going back to 2012 when 2,500 employees were dismissed due to underperformance. The company’s decision to terminate thousands of workers has caused the company to be in the public eye. Alongside, the firm announced that it had paid ₹1,135 crore in severance packages to employees who were laid off in Q2FY26.
TCS management has denied all the rumors and stated that the company is still aiming to be a “net job creator”. Furthermore, they clarified that the layoffs were primarily for mid- and senior-level employees and most of the employees released were due to “skills mismatch.” TCS Chief Human Resources Officer (CHRO) Sudeep Kunnumul stated that the impacted employees received severance benefits, psychological support, and guidance for career change.
On the one hand, TCS is reducing a certain number of positions; on the other, it is putting a premium on local hiring, especially in the United States. TCS has approximately 500 H-1B visa workers in the US and has already given 80% of their employees salary raises in the 2nd quarter. The company’s margins bore the brunt of these increases and the quarterly variable pay by 70 basis points. But according to TCS Chief Financial Officer Samir Seksaria, the rise in operational reforms and the company’s restructuring work helped alleviate the company’s costs to a certain extent.
Concerning employee attrition, TCS had a minor positive shift in voluntary attrition, which declined from 13.8% in the previous quarter to 13.3%. This is the first time over the past 5 quarters that attrition has gone down, and this trend had been a major worry for TCS and several other companies.
However, the large layoffs have invited some detractors. The critics suggest that the number of laid-off workers that the company has reported doesn’t tally with the net decrease in the workforce, implying that the firm may be under-reporting the amount of jobs lost. Harpreet Singh Saluja, President of the Nascent Information Technology Employees Senate (NITES), claimed that this variation in numbers between layoffs and total headcount shows how TCS is trying to conceal the real extent of its job cuts. Saluja also points to the lowered attrition rate to back the idea that many exit routes in the company were management-driven rather than voluntary resignation by employees.
TCS, on the one hand, is still committed to the plan of reorganization and the improvement of productivity, but, on the other hand, the layoffs have already generated discussions about how the company handles skills mismatches through employee management. It will take some time until the company’s trajectory of growth and staff morale fully exposed to the consequences of these moves reveal themselves.
