Not cutting jobs because of AI, says TCS CEO Krithivasan on 2% workforce layoff plans

TCS chief executive officer K Krithivasan

Tata Consultancy Services’ (TCS) plan to cut 2 percent of its global workforce, impacting about 12,000 jobs, is not driven by artificial intelligence efficiency gains but the company’s limited opportunities to redeploy employees amid skill gap.

TCS chief executive officer and managing director K Krithivasan, in an exclusive interview told Moneycontrol, “No, this is not because of AI giving some 20 percent productivity gains. We are not doing that. This is driven by where there is a skill mismatch, or, where we think that we have not been able to deploy someone.”

“It is not because that we need less people. We will continue to look for high (quality) talent, acquiring talent, training talent. That continues to happen. This is more about where there is a feasibility of deployment,” he added.

The job cuts will impact middle and senior level employees the most apart from some of the entry level associates who have been on the bench for a long time, Moneycontrol had exclusively reported on July 27.

Also read: TCS to cut 2% of workforce, affecting 12,000 employees amid skill gap and tech shift

“We trained a lot of people. We have trained about 550,000 people at the initial skills, 100,000 at the advanced skills. Essentially, after training whether we have the deployment feasibility issue. So, some of them could be trained, but maybe we are not able to train beyond level 1 and level 2 skills, because when the person is at a very senior person they may not be able to use the entry level skills,” Krithivasan had explained.

TCS will be providing notice period pay and an added severance package, it will also look to extend insurance benefits and offer outplacement opportunities for the impacted employees.

The layoffs won’t be geography or domain specific and will be concluded over the next three quarters of FY26

This is coming only a few weeks after the IT services behemoth updated its HR policy by mandating employees to have 225 days of billability in a year and limiting bench time to up to 35 days.

Read the full interview here : Had to take 'difficult call' to build stronger TCS, says CEO K Krithivasan after cutting 12,000 jobs