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Workforce Restructuring: A Shift Towards "Future-Readiness"

The most prominent news today is TCS's announcement that it plans to reduce its global workforce by approximately 2%, impacting over 12,000 employees, primarily in middle and senior management roles, throughout its fiscal year 2026 (April 2025 to March 2026). This move is being framed by TCS as part of its "Project Fluidity" and a broader strategy to become a "future-ready and agile organization" in an era of rapid technological shifts, especially with the widespread adoption of AI.

TCS CEO K. Krithivasan has clarified that these reductions are not solely due to AI directly replacing jobs, but rather to address evolving skill demands and challenges in redeploying talent whose current roles may not align with the company's future requirements. He emphasized that the company has invested heavily in employee development and aims to ensure associates are deployed effectively. For the impacted employees, TCS has committed to providing severance packages, extended health insurance, notice period compensation, and career transition assistance, acknowledging the challenging nature of these decisions. This proactive support aims to mitigate the human impact of the restructuring, even as employees and industry observers closely watch its execution.

This workforce adjustment comes just days after many TCS employees initiated legal proceedings challenging the company's modified "bench policy," which became effective on June 12, 2025. This revised policy stipulates that employees can only remain unbilled for a maximum of 35 days annually and must achieve at least 225 billable days per year. Failure to adhere to these new guidelines could lead to "professional setbacks or possible job loss." While TCS maintains this is a more structured version of an existing practice aimed at minimizing bench time and increasing productivity, employees and unions, such as the Nascent Information Technology Employees Senate (NITES), have expressed concerns, labeling the policy as "inhumane," "exploitative," and mentally taxing due to the pressure to secure projects rapidly.

Onboarding Delays: A Lingering Concern

Adding to the employee-related news, TCS continues to face scrutiny over delayed onboarding for a significant number of new hires, including approximately 650 experienced lateral hires and an unspecified number of fresh graduates. These individuals, many of whom have already resigned from their previous positions, are in a state of uncertainty due to postponements in their joining dates, often attributed to delays in project commencement.

The affected candidates have expressed considerable distress, finding themselves in professional and financial limbo. NITES has formally appealed to the Union Labour Minister, seeking intervention to ensure TCS provides definitive timelines for onboarding, offers financial compensation for the delayed period, and provides mental health support through its Employee Assistance Program (EAPs). While TCS has consistently reaffirmed its commitment to honoring all job offers, stating that "everyone who received an offer from TCS will be onboarded" and that "joining dates are decided as per business demand and, in some cases, they do get adjusted," the ongoing delays underscore the challenges the IT industry faces in balancing recruitment with fluctuating project demands and market uncertainties

Strong Financial Performance and Strategic Investments

Despite these internal adjustments, recent financial reports indicate that TCS continues to maintain a strong performance. For Q1 FY26 (April-June 2025), TCS reported a net profit of ₹12,760 crore, reflecting a 6% year-on-year growth. Revenue from operations also saw a 1.3% increase to ₹63,437 crore during the same period. The company also declared an interim dividend of ₹11 per share. CEO K. Krithivasan attributed this steady performance to strong deal closures and growing demand for new services, even amidst global macroeconomic and geopolitical uncertainties impacting client spending.

TCS's strategic approach for the future includes significant investments in emerging technologies, market expansion, large-scale AI implementation for clients and internal operations, strengthening partnerships, and developing advanced infrastructure. The company has made substantial progress in AI upskilling, with over 1.14 lakh employees trained in advanced AI skills, and associates collectively spending 15 million hours upgrading themselves in emerging technologies during the last quarter. This focus on AI and digital transformation is a key driver behind the current workforce rebalancing, as the company seeks to align its talent pool with the skills demanded by the evolving technological landscape.

Commitment to Corporate Social Responsibility Remains Strong

On a positive note, TCS continues to demonstrate its strong commitment to Corporate Social Responsibility (CSR). In the financial year 2024-25, TCS exceeded its mandated CSR obligation, spending ₹960 crore. Their CSR initiatives focus broadly on digital inclusion, skilling, and women's empowerment. Programs like "Ignite My Future" and "goIT" have reached millions of students globally, promoting computational thinking and digital literacy. The "BridgeIT" initiative continues to support rural entrepreneurship, particularly empowering women. TCS employees also actively contribute to community development through volunteerism.

In summary, today's news from TCS paints a picture of a company actively navigating a complex period of transformation. While facing employee concerns related to workforce adjustments and onboarding delays, TCS is simultaneously reaffirming its financial strength, accelerating its strategic shift towards AI-led operations, and maintaining its robust commitment to social responsibility. The coming months will be crucial in observing how TCS balances these multifaceted challenges and opportunities.