Indian IT services company Tata Consultancy Services (TCS) has announced its intention to reduce its workforce by 2% in response to AI-driven disruptions and macroeconomic uncertainties.

This decision will lead to approximately 12,200 job cuts, Reuters reported, citing a company statement. The reductions will primarily affect middle and senior management employees. 

“This transition is being planned with due care to ensure there is no impact on service delivery to our clients,” TCS said.

As of June 2025, TCS had more than 610,000 employees.

The announcement came as the Indian IT sector, valued at $283bn, is experiencing similar challenges. Clients are reportedly delaying non-essential technology spending due to weak demand, persistent inflation, and uncertainties surrounding US trade policies.

Earlier in July 2025, TCS chief executive K Krithivasan also noted that client decision-making and project initiations are facing delays.

The restructuring effort is aimed at transforming the company into a future-ready organisation.

“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,” The Times of India quoted Krithivasan as saying in an email to employees.

The company is currently focusing on deploying AI and other technologies while exploring new markets and managing an unpredictable demand landscape.

In June 2025, TCS announced the establishment of three new facilities in Europe to bolster its presence in the software-defined vehicles sector. This includes two automotive delivery centres in Germany, located in Munich and Villingen-Schwenningen, and an engineering facility in Romania.