TCS offers up to 2 years’ severance pay amid workforce restructuring

TCS

Information technology (IT) behemoth Tata Consultancy Services (TCS) is offering severance packages of up to two years’ salary to long-serving employees whose skills no longer align with company needs, as the Indian IT giant trims staff amid shifting client demand and rising automation.

In July, Moneycontrol exclusively reported that the IT behemoth will be letting go of 2 percent of its workforce, or roughly over 12,000 employees, over the next year, in a bid to become more agile and future-ready amid rapid disruptions in technology.

Also, read: TCS layoffs leave employees facing uncertainty and anxiety

Who is affected & what they get

Meanwhile, sources told Moneycontrol that the restructuring primarily affects employees whose skills have become redundant or who have not upskilled to meet evolving client requirements.

Under the program, employees in this category are entitled to a notice period pay of three months, followed by a severance package that ranges from six months to two years’ salary, depending on tenure.

“The lowest severance pay in this category is 6 months,” a source close to TCS said.

Also, read: Not cutting jobs because of AI, says TCS CEO Krithivasan

Employees who have been unallocated or “on the bench” for over eight months without finding a suitable role are offered a simpler package, consisting of notice period pay equivalent to three months.

Also, read: MC Interview: Had to take 'difficult call' to build stronger TCS, says CEO K Krithivasan

“In keeping with the values of our company, those affected by our recent initiative to realign skills have been provided care and support as is due to them in each of the individual circumstances,” the company said in a statement.

Here’s a lowdown.

Bench employees (unallocated for over 8 months)

Employees with 10-15 years of service can expect approximately 1.5 years of severance pay, sources said.

TCS CEO K Krithivasan, in July, also said that “one of the toughest decisions” he has made will primarily affect middle and senior-level employees.

Moreover, only in isolated cases without active roles are still being considered, sources said.

Employees with over 15 years of service

In addition, the IT services exporter is providing support for career transition through outplacement services, covering agency fees for three months, and sometimes longer for junior associates.

In select cases, the company also funds access to mental health support or therapists through its “TCS Cares” program, sources added.

Early Retirement

Sources also say the company is extending early retirement options for employees whose retirement is due, allowing them access to all retirement benefits, including insurance along with an additional severance package ranging from six months to two years’ salary, again based on tenure.

Amidst widespread resentment, the bulk of the workforce adjustments were completed in August and September, sources indicate.

Only isolated cases of employees without a role are still being evaluated, with options to move into the Resource Management Group (RMG) to explore roles across the company.

Also, read: TCS job cuts not driven by margins, says TCS CEO K Krithivasan

FAQs

Who qualifies for the highest severance?
Employees with over 15 years of service whose skills have become redundant can receive up to 2 years’ pay.

Are all bench employees being laid off?
No, only those unallocated for over 8 months without suitable roles are affected.

What support is offered besides pay?
Outplacement services, access to mental health support, and TCS-funded therapy in select cases.

Can employees take early retirement?
Yes, employees eligible for retirement can opt for early retirement with full benefits plus additional severance.