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TCS CEO clarifies layoffs due to skill mismatch, not AI
TCS is set to lay off approximately 12,000 employees

TCS CEO clarifies layoffs due to skill mismatch, not AI

Jul 28, 2025
02:44 pm

What's the story

Tata Consultancy Services (TCS) has announced plans to lay off some 2% of its global workforce, or around 12,000 employees. There has been speculation about the role of artificial intelligence (AI) in these layoffs, but TCS CEO K Krithivasan has clarified that the cuts are not due to AI replacing jobs for efficiency gains but rather a "skill mismatch." Krithivasan told Moneycontrol in a recent interview.

Transition details

Journey to become a future-ready organization

TCS said it is on a journey to become a "future-ready organization." As part of this transition, the company will be releasing associates whose deployment may not be feasible. The layoffs will mostly affect mid-to-senior level employees over the course of the year. However, some junior employees on long bench time could also be impacted.

Employee support

Affected employees will be paid for their notice periods

TCS has assured that affected employees will be paid for their notice periods and given a severance package. The company also plans to provide extended insurance benefits and outplacement support to help those impacted. Despite the job cuts, TCS remains focused on future-readiness and will continue hiring high-quality talent. "This is not a question of demand. It is about us being future-ready," Krithivasan said.

Change in approach

Transition to agile, product-centric model

TCS is also undergoing a structural shift from the traditional "waterfall" project management method to an agile, product-centric model. This change has reduced the need for conventional project and program managers. Despite investing heavily in AI upskilling and training over 5.5 lakh employees in basic AI skills, some senior professionals have found it difficult to transition to tech-heavy roles due to skill mismatches or inability to redeploy within TCS's evolving business model.