TCS Layoffs: Tata Consultancy Services faces protests and union action amid its $6.5 billion AI strategy rollout and workforce restructuring, with labour officials intervening in Bengaluru.
AI Ambition and Transformation Plan
Tata Consultancy Services (TCS), India’s largest IT employer, is facing growing labour unrest after unveiling a $6.5 billion AI strategy aimed at transforming the company into the “world’s largest AI-led technology services firm.” The announcement, made during its Q2 results on October 9, 2025, comes amid widespread TCS layoffs that have rattled India’s IT workforce.
Under its five-pillar TCS AI strategy, the company plans to redesign services, overhaul internal operations, and massively reskill employees. A key part of this vision is the construction of AI and sovereign data centres across India, representing a total investment of $6.5 billion—nearly equal to the nation’s current overall data centre capacity.
TCS CEO K. Krithivasan said the rollout will occur over five to seven years, with each 150 MW data block costing around $1 billion. The company expects its new subsidiary to start generating revenue within 18–24 months, serving AI startups, deep tech firms, hyperscalers, and government institutions. Funding will come through a blend of equity and debt, reflecting the company’s push to stay competitive against global tech giants like Microsoft and Google.
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TCS Layoffs Trigger Employee Backlash
The TCS layoffs have coincided with this massive transformation push, sparking allegations of coercive practices and unfair terminations. Over 20,000 employees, primarily in mid- and senior-level roles, have reportedly lost their jobs in recent months—the largest workforce reduction in the company’s history.
While TCS HR head Sudeep Kunnumal maintains that only about 6,000 employees, or 1% of the workforce, were released based on “performance evaluations,” employee unions dispute the numbers, claiming that nearly 38,000 staff have been affected if “voluntary exits” and “non-renewed contracts” are included.
Employees allege being pressured to resign under threats of career stagnation, while some women on maternity leave were reportedly asked to return early or risk losing their positions. Many see this as evidence that TCS’s AI restructuring has disproportionately affected vulnerable segments of the workforce.
TCS Layoffs: Labour Disputes Escalate in Bengaluru
The controversy has now entered the legal domain. The Karnataka State IT/ITeS Employees Union (KITU) has filed a case under the Industrial Disputes Act, arguing that the layoffs breach statutory norms. The conciliation process, led by Additional Labour Commissioner G. Manjunath, began on October 15, 2025 in Bengaluru.
Representing TCS was Boban Varghese Thomas, GM of Human Resources, while KITU president V. J. K. Nair and secretary Sooraj Nidiyanga appeared for the employees.
Parallel to the legal proceedings, the IT & ITES Democratic Employees Association (IIDEA) and KITU have organized protests outside TCS’s Whitefield campus, accusing the company of enforcing the controversial “225 billable days” policy, which they call exploitative and unsustainable. Protesters are demanding:
- Withdrawal of allegedly illegal retrenchments
- Reinstatement of wrongfully terminated employees
- Government oversight and stronger labour protections in the IT sector
TCS Layoffs: Government and Industry Response
The Labour Department has scheduled a follow-up conciliation meeting for November 5, 2025, to assess TCS’s compliance and address pending grievances. Officials have emphasized that the IT sector is not exempt from labour laws and that all retrenchments must follow due process.
Industry analysts view TCS’s AI investment as a high-stakes gamble—a move designed to keep pace with global competitors in the rapidly evolving artificial intelligence space. However, the timing of the TCS layoffs has raised ethical and reputational concerns, especially as India’s IT industry faces scrutiny over its employment practices.
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The Road Ahead
As TCS tries to balance its AI ambition with employee welfare, the outcome of the Bengaluru conciliation process may set an important precedent for India’s $250 billion IT industry.
The next few weeks will test how effectively Tata Consultancy Services can align its technological transformation with social responsibility—maintaining public trust, ensuring labour rights, and leading India’s workforce confidently into the AI era.