India's top IT company Tata Consultancy Services (TCS) saw its share price fall nearly 2% on Monday morning after it announced a large-scale layoff plan for FY2025-26. The company plans to reduce its global workforce by 2%, which translates to around 12,261 jobs, mostly affecting middle and senior-level employees.
At 9:40 am, the TCS share price was down 1.25% at ₹3,095.25 on the BSE, having slipped as low as ₹3,081.20 earlier in the day. The fall made TCS one of the top losers in the Nifty IT index, which itself dropped over 1.6%. Peers like Infosys and Wipro also saw over 1% decline.
TCS Stock Performance Over Time
The layoff news comes at a time when TCSshares have been under pressure:
· Down 10% in the last 1 month
· Down 23% in the last 6 months
· Down 30% in the last year
· Up just 33% in 5 years
Despite being a bellwether in India’s tech industry, TCS has underperformed benchmark indices significantly.
Why Is TCS Cutting Jobs?
TCS CEO K Krithivasan clarified in an interview with Moneycontrol that the layoffs are not due to downsizing, but rather skill mismatches and employee deployment challenges.
“We will continue to hire and train good talent. This is more about feasibility of deployment,” he said.
The company aims to become a “future-ready organization” with increased focus on AI deployment and global expansion.
Financial Snapshot (Q1 FY26)
TCS announced its Q1FY26 results on July 10, with a modest rise in profits but a decline in revenue:
| Metric | Q1 FY26 | Q4 FY25 | Change |
|---|---|---|---|
| Net Profit | ₹12,760 crore | ₹12,224 crore | +4.38% |
| Revenue | ₹63,437 crore | ₹64,479 crore | -1.6% |
| Revenue in USD | $7,421 million | $7,465 million | -0.6% |
| EBIT | ₹15,514 crore | ₹15,610 crore | -0.6% |
| EBIT Margin | 24.5% | 24.2% | +30 bps |
| Interim Dividend | ₹11 per share | — | — |
Rising Attrition and New Bench Policy
· TCS’ attrition rate rose to 13.8% in June 2025, up from 13.3% in March 2025.
· The company has changed its bench policy, asking employees to log at least 225 billable days a year, and spend less than 35 days on the bench.
The CFO said retention of top-level talent is now a top priority.
What Should Investors Know?
The layoffs signal a strategic transformation, with TCS focusing on AI integration, efficient deployment, and skill-based hiring. While the stock is under pressure in the short term, long-term investors may consider this a restructuring phase aimed at improving profitability and future-readiness.
Investment Risk Advisory
Investing in equity markets involves risks. Past performance is not indicative of future returns. Please consult a certified financial advisor before making investment decisions.
