TCS’s Historic Layoffs: A Workforce Analytics Perspective on Talent Strategy

In a move that’s shaking up India’s IT services sector, Tata Consultancy Services (TCS) is laying off over 12,000 employees, marking the largest workforce reduction in its history. But this isn’t just cost-cutting. It’s a window into the future of tech talent.

As TCS put it, “We will be releasing associates from the organisation whose deployment may not be feasible. This will impact about 2% of our global workforce, primarily in the middle and the senior grades, over the course of the year.”

At first glance, it looks like a cost-cutting measure. But if you dig into the workforce data, a different picture starts to emerge. This isn’t just a story about trimming the fat. It’s about shifting priorities, evolving capabilities, and adjusting how talent is deployed in the age of AI.

This move does not appear to be entirely isolated from the rest of the industry. Job postings in information technology services declined by 12% in June, 2025, according to Aura’s global workforce data. That drop reflects a shift from rapid expansion to consolidation in the tech sector. Let’s break it down.

Inside TCS’s Workforce Shakeup: What the Data Reveals

TCS ramped up hiring aggressively from 2020 to 2022. From the Aura chart below, growth primarily occurred in engineering, operations, and IT roles, driven by strong demand for digital transformation and infrastructure projects.

(Total Current Headcount is approximately 613,000, headcount trend in graph is a measured sample)

By 2022, total headcount peaked. But since then, growth has slowed and eventually reversed. Most of the recent decline has come from middle and senior-level roles, which aligns with what TCS officially said in its announcement.

This appears to be a return to a more sustainable size and a reallocation of resources toward areas that matter more in the future, such as those aligned with AI innovation.

Layoffs vs. Hiring: Why TCS Is Rebuilding, Not Just Cutting

Backing this, we see that certain areas are still growing. Despite the layoffs, TCS still appears to be hiring. In fact, job postings from TCS increased significantly in the first half of 2025, particularly in the Asia Pacific and European regions.

April 2025 also saw a notable increase in postings, with over 18,000 open roles. This suggests that while some positions are being eliminated, others are being added in new locations or functions. So this big layoff does not appear to be a hiring freeze, but more of a reshuffle on a grand scale.

The pattern also reflects shifting client needs. Certain delivery centers are likely being de-emphasized while others are growing. And the roles being filled now may look very different from the ones being cut.

Where TCS Talent Is Going and Why It Matters

When workers leave TCS, they don’t stay unemployed for long. Aura talent flow data indicates that a significant proportion of departing employees transition to direct competitors or tech-forward professional services firms.

Accenture, Infosys, Capgemini, Cognizant, and HCL are top destinations. So are global banks and consulting firms. The takeaway? TCS talent is still in demand, and competitors will be seizing the chance to scoop up seasoned professionals.

In other words, TCS may be cutting back, but the broader demand for their experienced professionals appears strong at top firms.

This Isn’t About AI Taking Over

TCS leadership emphasized that the cuts aren’t due to AI automation replacing people, but because redeployment efforts have not been effective, especially at middle and senior levels.  The layoffs are being driven by skill mismatches and underutilized talent. That said, AI remains part of the broader picture.

The rise of automation and AI-powered tools is transforming the way work is done and what skills are considered essential. Roles that once made sense might now be redundant, not because AI is directly replacing them, but because the work itself has undergone significant changes. It’s a slower and more purposeful transition than an "AI job cut" that many headlines suggest, but it’s happening nonetheless.

Organizations are being compelled to reassess the types of talent they truly require. That’s what TCS appears to be doing here.

Lessons Business Leaders Can Learn from the TCS Shakeup

This need for workforce realignment is not just a TCS matter. Over 42,000 jobs have been cut across TCS, Infosys, Wipro, and HCLTech in just two years, signaling a broader shift in India’s IT services workforce, so this is not just an isolated move by one firm.  Companies across various sectors, such as the US tech sector, are undergoing similar recalibrations.

If you’re leading a business or managing a portfolio, the question isn’t whether layoffs are happening. It’s whether you can see them coming, understand what they signal, and respond in time. Ask yourself if you can answer these questions for your firm or the ones you study.

At Aura, we work with consulting firms, private equity funds, and large enterprises that want to stay ahead of these shifts. Our workforce intelligence platform helps clients:

• Track changes in hiring patterns across regions and roles

• Benchmark headcount by function and seniority

• Monitor where top talent is going and why

• Assess workforce health and spot organizational risks early

When you have this level of insight, you don’t just react to news. You can anticipate moves, benchmark against competitors, and make more informed decisions across HR, strategy, and investment.

What the TCS Layoffs Mean for Your Talent Strategy

The layoffs at TCS are significant, but they’re not a sign of crisis or collapse in the IT services industry. Instead, they reflect a broader shift in how companies are managing talent amid changing technologies, client needs, and market dynamics.

What’s happening at TCS is part of a larger pattern: a strategic recalibration of workforce models. Many large organizations are moving away from blanket growth toward more focused, capability-aligned hiring. The firms that navigate this shift successfully will be those with real-time insight into how workforce trends are evolving:  by role, region, and skill.

These are difficult decisions. But with the right workforce intelligence, they become smarter, more proactive moves that position your business for long-term resilience.

Get Ahead of Workforce Disruption

Don’t wait for headlines to tell you what’s changing. Request a demo of Aura to explore workforce trends, talent shifts, and organizational risks before they impact your business.