India's IT giant Tata Consultancy Services to cut 12,000 jobs
TCS employs 613,000 people worldwide, and the IT services sector is one of India's biggest employers and revenue earners.
Mumbai - Indian IT giant Tata Consultancy Services (TCS) said on July 27 it will cut around 2 per cent of its global workforce, or about 12,000 jobs, as demand contracts in the sector it leads.
The software services firm – India's largest by market cap – said the reductions would mainly affect employees in middle and senior roles and would be rolled out over the course of 2025.
TCS employs 613,000 people worldwide, and the IT services sector is one of India's biggest employers and revenue earners.
The US$283 billion (S$362.5 billion) sector has had to contend with clients holding back non-essential technology spending because of weak demand, persistent inflation and lingering uncertainty over US trade policies.
The company said the move was part of efforts to become a 'future-ready' organisation as it enters new markets and scales up its use of artificial intelligence.
'As part of this journey, we will also be releasing associates from the organisation whose deployment may not be feasible,' TCS said in a statement.
It said the restructuring was being carried out with 'due care' to avoid disruption to client services.
After TCS's June-quarter revenue fell short of expectations, chief executive officer K Krithivasan said in July that there were delays in client decision-making and project starts.
IT services are the most visible part of India's modern economy and historically one of its biggest white-collar job creators, driving the expansion of the middle class.
But a slowdown in the sector has seen hundreds of thousands of new graduates struggle to find work.
Phil Fersht, CEO of IT advisory firm HFS Research, said that the impact of AI is eating into the people-heavy services model in the sector.
'(That model) is forcing large service providers such as TCS to rebalance their workforces to maintain profit margins and stay price-competitive in a cut-throat market where clients are demanding 20-30 per cent price reductions,' Mr Fersht said.
The decision by TCS, considering its culture of being a stable place to work, highlights this sectoral trend, he added. AFP, REUTERS
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