Tata Consultancy Services (TCS), India's leading IT services firm, has announced a strategic decision to reduce its workforce by approximately 2% during the fiscal year 2026, impacting over 12,000 positions. This move primarily affects middle and senior management roles and is part of TCS's broader initiative to align its operations with the accelerating adoption of artificial intelligence and automation technologies. The company emphasizes that this transition is being managed carefully to ensure uninterrupted service delivery to clients.

The decision reflects the broader challenges faced by the $283 billion Indian IT sector, including cautious client spending due to global economic uncertainties and shifting trade policies. TCS CEO K Krithivasan highlighted delays in client decision-making and project initiations as contributing factors. Industry experts note that the rise of AI is transforming traditional service models, prompting firms like TCS to restructure their workforces to maintain competitiveness and meet client demands for cost efficiency.

Despite these changes, TCS maintains a cautiously optimistic outlook, focusing on leveraging technology to drive future growth and continue delivering value to its global clientele.