TCS Layoffs: A Cost-Cutting Measure with Long-Term Implications, Report Warns

Tata Consultancy Services (TCS) has announced a significant decision to cut costs by laying off 2% of its workforce, which amounts to approximately 12,000 employees. As per a Jefferies report, this move is seen as an effort to safeguard profit margins in the face of ongoing growth difficulties. This marks the third such measure in recent months by TCS.

Previously, the IT leader postponed wage hikes until April 2025 and introduced new benching policies in June 2025, restricting employees' non-billable periods to 35 days annually. Jefferies highlighted that an increased focus on cost-saving may have adverse long-term effects on the company, affecting employee morale and operations.

The report further warns that although TCS traditionally maintains low attrition levels by offering job stability and career growth prospects, the current layoffs could alter this trend. It notes parallels with Cognizant's rising attrition rates between 2020 and 2022, amid a broader industry pattern of weak net hiring and moderated demand outlook.

(With inputs from agencies.)