New Delhi, January 13, 2026, 09:34 p.m. IST
TCS layoffs have triggered sharp criticism from employee unions, with advocacy groups alleging forced exits and profit-driven restructuring. As India’s largest IT firm pivots to AI, tensions rise over workforce cuts, severance practices, and the broader implications for the IT sector.
Tata Consultancy Services (TCS), India’s largest IT services firm, is facing mounting criticism from employee unions over ongoing workforce reductions. The company has reportedly cut its headcount by nearly 30,000 employees in recent months, sparking allegations of coercive practices against mid- and senior-level staff. While TCS maintains that the downsizing is driven by skill mismatches and deployment challenges, advocacy groups argue that the measures are profit-driven and disregard employee welfare.
The controversy coincides with TCS’s Q3 FY26 earnings, which revealed continued headcount shrinkage into 2026, with no fixed target for stabilization.
Advocacy Groups Allege Forced Exits
The Nascent Information Technology Employees Senate (NITES) has sharply criticised TCS, claiming a “serious disconnect” between company statements and employee realities. NITES President Harpreet Singh Saluja alleged that long-serving employees, those with 10 to 20 years of tenure, were pressured into resignations, subjected to extended benching, role eliminations, and biased performance reviews.
The group has demanded an independent audit of all exits, accusing TCS of prioritising profits over loyalty to its workforce.
Other unions, including the IT & ITES Democratic Employees Association (IIDEA) and the Forum for IT Employees (FITE), have echoed these concerns. They estimate that layoffs will affect between 12,000 and 20,000 employees, citing new policies such as mandatory 225 billable days annually as unrealistic. These unions are urging employees to document coercive practices and seek intervention from labour commissioners rather than resigning voluntarily.
TCS Defends Restructuring Approach
In response, TCS Chief HR Officer Sudeep Kunnumal clarified that only 1,800 formal separations occurred in the December quarter, with the remainder attributed to natural attrition. He emphasised that exits happen only for “clear and genuine reasons” and denied allegations of arbitrary downsizing.
Kunnumal reiterated that the company is not “chasing numbers” but following a July 2025 plan to trim 2% of staff for better alignment. He further highlighted that affected employees receive severance packages, counselling, outplacement assistance, and notice pay, dismissing claims of illegal practices as “inaccurate and mischievous.”
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AI Growth Amid Shrinking Workforce
Despite workforce reductions, TCS underscored its AI-driven growth trajectory. The company reported $1.8 billion in annualized AI services revenue, marking a 17.3% quarter-on-quarter increase. CEO K. Krithivasan positioned this momentum as central to TCS’s ambition of becoming the world’s largest AI-led technology services company.
Financially, Q3 revenue rose 5% to ₹67,087 crore, though net profit fell 14% to ₹10,657 crore, largely due to restructuring costs and compliance with new labor codes.
Broader Implications for India’s IT Sector
| Aspect | Union Concerns | TCS Response |
| Scale of Cuts | 20,000+ unacknowledged exits via coercion | ~30,000 attrition + 1,800 formal separations |
| Targets | Mid/senior staff with 10–20 years of service | Skill-project mismatches, no fixed target |
| Support Offered | Insufficient; demands audit and reinstatement | Severance, counselling, outplacement assistance |
| Context | Profit-driven, not financial distress | Deployment feasibility, AI pivot |
Outlook
The standoff between TCS and employee advocacy groups highlights the growing tension in India’s IT industry as companies pivot to AI while grappling with legacy workforce costs. With unions signalling further protests if layoffs persist into 2026, the debate underscores a critical question: Can India’s IT giants balance technological transformation with employee welfare?
