MUMBAI, INDIA — India’s IT giant, Tata Consultancy Services (TCS), has recently announced a comprehensive severance package. This offers its employees up to two years’ salary as part of its workforce restructuring efforts.
This severance program comes at a time when TCS adjusts its capabilities in response to ever-evolving technological shifts and industry demands.
In July, the company announced its decision to lay off approximately 2% of its global workforce, which translates to over 12,000 employees, marking its second major restructuring. This time, the reasons don’t point to employees’ performance, but rather the company’s decision on which skills are no longer aligned with its requirements.
Who Are Affected and What They Receive
This isn’t because of AI giving some 20% productivity gains. This is driven by where there is a skill mismatch or where we think we have not been able to deploy someone. Some people, especially at senior levels, find it difficult to transition to tech-heavy roles.
— K. Krithivasan, TCS CEO, about the layoff decision
Krithivasan acknowledges the difficulty of the decision and reassures that the process will be handled with great compassion.
These job cuts will be implemented gradually over the course of FY2026. Affected employees will primarily be mid-to-senior employees and junior staff who have been “on the bench” for a prolonged period.
Key Elements of the Severance Program
- Affected employees will be entitled to three months’ notice pay, followed by a severance package ranging from six months to two years’ salary, scaled according to tenure.
- Employees who have been with the company for 10–15 years may receive 1.5 years’ severance, while those with over 15 years will receive higher payouts.
- Employees who have been unallocated for over eight months will receive three months’ notice pay.
- Employees approaching retirement are also being offered early retirement plans, which include full retirement benefits, an additional severance package, and insurance.
- Employees will also be offered outplacement services and mental health support under the ‘TCS Cares’ program.
This restructuring aligns with the broader global shift in which AI and automation are reshaping the workforce, underscoring the need for workers to reskill to mitigate future job displacements.
