TCS ends layoffs, resumes annual salary increment cycle
What's the story
Tata Consultancy Services (TCS) has announced the end of its layoff cycle and the resumption of its regular annual salary increment cycle. The decision comes after a challenging year for the company, which saw workforce restructuring and cautious decision-making due to a slower demand environment. The move is expected to bring some relief to employees who have been dealing with uncertainty around pay hikes and job stability.
Restructuring details
End of layoff cycle
Earlier, TCS had announced plans to cut about 2% of its workforce as part of a restructuring exercise. This, along with stricter bench policies, resulted in exits mainly at mid and senior levels. However, the company has now confirmed that this phase is over and it is moving forward with its regular processes including annual salary revisions.
Recruitment strategy
TCS's hiring plans
Despite a decline of over 23,000 employees in FY2026, TCS has maintained that the drop isn't solely due to layoffs. The company's Chief Human Resources Officer Sudeep Kunnumal told The Times of India that TCS continues to hire new talent and is one of India's largest recruiters. The company has already made 25,000 campus offers in India and plans to hire about 40,000 freshers every year.
Financial outlook
Positive momentum in hiring
In the fourth quarter, TCS added over 2,300 employees sequentially through lateral hiring and fresher intake. This indicates that while the overall headcount has declined on a yearly basis, hiring activity hasn't stopped. CEO K Krithivasan said the company is entering the new fiscal year with positive momentum after some pressure earlier. He acknowledged a decline in Q1 due to a large transformation program but noted growth in the next three quarters.
AI growth
Growth in AI business
TCS is also witnessing growth in its AI business. The company reported over $2.3 billion in revenue from AI for the fourth quarter, up from previous quarters. TCS has signed deals with OpenAI and AMD for AI-powered data center projects. In the March quarter, TCS posted a 12% year-on-year (YoY) rise in net profit to ₹13,718 crore while revenue increased by 9.6% to ₹70,698 crore.