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Time of India
28 minutes ago
- Time of India
TCS to axe 12,000 jobs; IT giant's biggest layoff ever
TCS to axe 12,000 jobs; IT giant's biggest layoff ever BENGALURU/MUMBAI: In what will be its biggest layoff to date, India's largest IT services company and Tata Group's most-profitable unit, TCS, will axe 12,261 jobs, which is approximately 2% of its workforce as AI-led disruptions and macro uncertainties affect business demand. TCS, chaired by N Chandrasekaran, had just over 6.1 lakh employees worldwide as of June. The company has been periodically restructuring its workforce in response to changing business dynamics and other factors. In FY15, it eliminated more than 3,000 jobs, representing about 1% of its total employee count. The latest job cuts will primarily affect mid-level and senior executives. This move marks one of the company's most significant strategic shifts: embracing AI, and letting go of employees who cannot be redeployed within the firm. The workforce reduction — long considered rare in the industry — underscores the tough demand environment, especially in the absence of large deals like BSNL. Industry observers see this as an early sign of a broader shift, where rising reliance on automation and margin pressures are driving companies to reduce employee costs. TCS said the restructuring initiative is aimed at transforming the company into a future-ready organisation. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Mini House for 60 sqm for Seniors with Toilet and Bath (Price May Surprise You) Pre Fabricated Homes | Search Ads Search Now Undo 'This includes strategic initiatives on multiple fronts, and while these changes are necessary for our growth and evolution, we understand the impact on our colleagues. We thank them for their service and are committed to supporting them through this transition,' TCS CEO K Krithivasan said in an email to employees. Phil Fersht, CEO of HfS Research, said the impact of AI is eating into the people-heavy services model and forcing the large providers to rebalance their workforces to maintain their margins and stay price competitive in a cut-throat market where clients are demanding 20-30% price reductions on deals. Other Tata Group entities, such as Tata Steel and Tata Motors, have also been cutting jobs periodically to lower costs and enhance profitability. In 2019, Tata Steel eliminated 3,000 jobs in its European operations. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Mint
2 hours ago
- Mint
Three years on, AI is prompting IT services companies to cut workforce.
Tata Consultancy Services (TCS) will lay off approximately 12,000 employees this fiscal year, as India's biggest private employer adjusts to slowing growth and rising artificial intelligence (AI). The company attributed the decision, which will primarily impact senior and middle-level employees, partly to AI. "TCS is on a journey to become a future-ready organization," a company statement said on Sunday. "This includes strategic initiatives on multiple fronts including investing in new-tech areas, entering new markets, deploying AI at scale for our clients and ourselves, deepening our partnerships, creating next-gen infrastructure and realigning our workforce model. 'As part of this journey, we will also be releasing associates from the organization 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." This would imply that TCS, which ended the June quarter with 613,069 employees, will let go of 12,200 employees. Mint has learnt that TCS has already asked 100 employees in Bengaluru to go over the last fortnight. The TCS job cut comes 30 months after the debut of ChatGPT cast a shadow over the business model of India's IT giants, who employ armies of coders. Just two weeks ago, India's third-largest IT services HCL Technologies Ltd mentioned potential layoffs as automation replaces work done by graduates. 'The impact of AI is eating into the people-heavy services model and forcing the large service providers such as TCS to rebalance their workforces to maintain their profit margins and stay price competitive in a cut-throat market where clients are demanding 20-30% price reductions on deals," said Phil Fersht, chief executive of HFS Research. 'This trend will last for about a year as the leading providers focus on training junior talent to work with AI solutions, and are forced to move on people who will struggle to align with the new AI model we call services-as-software," said Fersht. Meanwhile, fourth-largest Wipro Ltd is planning English competency tests for senior executives. Employees faring poorly in the first-of-its-kind exercise may be put on performance improvement plans, according to three executives privy to the development, stoking fears of potential layoffs. 'Please note that it is mandatory to take the communication assessment and clear it," read an internal email shared with Wipro employees on 19 July and accessed by Mint. 'Not taking the assessment will invite disciplinary action. Not clearing it in one attempt will result in a Performance Improvement Plan (PIP)," read Wipro's email. A PIP is often seen as a prelude to termination. An email sent to Wipro seeking a comment went unanswered. At HCL Technologies, it is graduates who are in the crosshairs, unlike TCS and Wipro, where the heat is on middle and senior employees. "Of course, we have had a good amount of people released due to the productivity improvements. Now, not all of them are readily redeployable, because the requirements for some of the entry-level or lower-end skills are being addressed through automation and other elements," CEO C. Vijayakumar told analysts on 14 July. "The training and the redeployment time is longer. Some of them will be redeployed, but for others, it may not be possible. So, some amount of change in the industry is also kind of causing this," said Vijayakumar. HCL did not specify what percentage of workforce would be impacted. An email seeking comment went unanswered. The news of layoffs at TCS, first reported by Moneycontrol on Sunday, has also sparked debate about whether it is due to disruption from AI or the company's underperformance. "This round of layoffs is completely on account of slow growth," a TCS executive said on the condition of anonymity. 'Automation and GenAI cannot be displacing executives with 10 or more years of experience." TCS's under-performance under K. Krithivasan, who took over as CEO on 1 June, 2023, has caused anxiety among senior executives and a few analysts. In the June quarter, the company reported the slowest revenue growth among the top five, reporting a 0.59% sequential revenue decline to $7.42 billion. It's not a one-off either. Between 1 July 2023, and 30 June 2025, TCS achieved a 0.34% compounded quarterly dollar revenue growth, with its revenue increasing from $7.22 billion in the June quarter of 2023 to $7.42 billion in the June quarter of 2025. Infosys, in comparison, achieved a growth of 0.85% during this period, while HCL Technologies achieved 1.29%. For this reason, analysts at Kotak Institutional Equities believe TCS has lost its sheen compared to its peers in recent years. "TCS's relative resilience (ability to bounce back from a shock) versus peers has narrowed compared with the past. Relative competitive advantage has declined," its analysts Kawaljeet Saluja, Sathishkumar S., and Vamshi Krishna wrote on 11 April. 'TCS did not lead growth in the past two years, even when demand was driven by cost take-outs. Performance in developed markets in FY2025 has been poor with a decline in North America," the Kotak note added. Keith Bachman, analyst at BMO Capital Advisors, said AI-related productivity benefits could be meaningful in the 20-30% range over time. "Hence, all services providers will need to 1) gain share and/ or 2) enable and capture new addressable market opportunities to sustain growth. We remain concerned on impact to long-term growth from AI efficiency," wrote Bachman, who was among the first to cite GenAI's threat to IT services firms, on 23 July. Nearly a year after the launch of ChatGPT, Bachman had cautioned, 'First, all IT service providers have adopted new tools or end solutions that caused pressure on billable hours, to include Robotic Process Automation (RPA) and code repositories, amongst other areas. Further, each new tool or solution generates higher efficiency than the previous tools or solutions."
United News of India
3 hours ago
- United News of India
Technopark, India's first IT Park, turns 35
Thiruvananthapuram, July 27 (UNI) Technopark, India's pioneering IT campus located in Kerala's capital, is set to complete its 35th anniversary on July 28. What was once a tranquil expanse of cashew groves at Vaidyankunnu near the National Highway has transformed into one of Asia's largest and greenest IT parks. Technopark, the flagship of Kerala's IT vision, owes its remarkable evolution to visionary leadership and sustained bipartisan political support. Over the decades, it has played a pivotal role in reshaping Thiruvananthapuram into a thriving technology hub, powering Kerala's transition to a knowledge-driven economy. Technopark has been central to the development of Kerala's IT ecosystem. With state-of-the-art infrastructure, green-certified campuses, and a business-friendly environment, it has attracted a diverse mix of global IT giants, Indian majors, and fast-growing startups. Today, Technopark is a major contributor to Kerala's IT exports, which reached ₹13,255 crore in 2023–24 and are projected to grow by at least 15% in 2024–25 (official figures awaited). It continues to play a vital role in driving the state's overall economic development. Brahmasoft which later evolved into RR Donnelley through a series of acquisitions and now employs over 2,000 people was the first company to begin operations in Technopark's inaugural building, Pamba. Among the early anchor tenants was Tata Consultancy Services (TCS), which not only commenced operations during the Park's formative years but also played a key role in shaping its master plan that helped lay the foundation for Technopark's long-term infrastructure development and growth. 'Technopark has been an ecosystem enabler with a proud legacy, empowering global companies, SMEs/startups, and emerging tech players for 35 years,' said Col Sanjeev Nair (Retd), CEO of Technopark. 'With strong ESG principles, a consistent CRISIL A+/Stable rating for four consecutive years demonstrating creditworthiness and financial health along with landmark expansions and a vibrant ecosystem, we are entering a new era of innovation.' He added that Thiruvananthapuram, the capital city of Kerala with its rich talent pool and exceptional quality of life, has naturally evolved into a hub for technology-driven growth. 'The availability of skilled talent, mature infrastructure, low attrition rates, affordable cost of living, and government-backed land leasing policies continue to be Technopark's strongest advantages,' he said. Today, Technopark spans five campuses (four in Thiruvananthapuram and one in Kollam) across 760 acres, offering 12.72 million square feet of developed IT space. It hosts over 500 companies, including leading industry names such as Infosys, UST, TCS, HCLTech, Accenture, Tata Elxsi, Allianz, Guidehouse, Nissan Digital, Oracle, IBS, Quest Global, Toonz Animation etc. Several prominent Global Capability Centres (GCCs) including EY, Allianz, H&R Block, Nissan Digital, Accenture, Equifax, Insight, ICON, RM Education, and Safran have established significant operations at the park. Technopark is also home to state-led institutions that drive innovation and skill development, such as the Kerala Startup Mission, Digital University Kerala, ICT Academy of Kerala, Kerala Space Park, and the upcoming Digital Science Park. Further underscoring its global appeal, offshore firms like Armada and Dubai Insurance have chosen Technopark as their Indian operations base. Technopark also works with several co-developers to build and operate world-class IT infrastructure. Key partners include Embassy Taurus, Brigade Enterprises Limited, Carnival Technopark, Amstor Information Technology, Padmanabham, M-Square (M2) etc all of whom contribute to expanding the Park's capacity and enhancing its operational ecosystem. Technopark is poised for significant growth, with over 4 million sq. ft. of built-up space under development. These upcoming projects are expected to generate more than 30,000 new jobs. UNI DS SSP
