TCS faces labour ministry scrutiny amidst 12,000 job cuts, hiring delays

TCS will trim its workforce by two percent, impacting 12,000 jobs over FY26.

The chief labour commissioner (CLC), under the Union labour ministry, has summoned senior executives of Tata Consultancy Services (TCS) on Friday, August 1, to discuss matters linked to mass layoffs and delays in getting new hires on board.

"There is a meeting on Friday to discuss the matter… Can’t comment on any outcome," a ministry official told Moneycontrol.

On Sunday, Moneycontrol reported that TCS would trim its workforce by 2 percent, affecting 12,000 jobs, over FY26. "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," CEO K Krithivasan told Moneycontrol.

The Nascent Information Technology Employees Senate (NITES) has written two letters to the office of the CLC in recent days, seeking the ministry’s intervention in the matter.

In its July 28 letter, NITES termed the layoffs at TCS "inhumane", "unethical" and "outright illegal", and sought an immediate halt to all terminations and the reinstatement of affected employees.

“Most of those affected are mid- and senior-level professionals who have served the company loyally for 10 to 20 years. The email was callously sent on a Sunday evening, without prior notice or any formal communication process in place. This mass layoff is not only unethical and inhumane; it is outright illegal. TCS has planned to terminate thousands of employees without giving them due notice or any prior intimation to the government, all of which are mandatory under existing Indian labour laws," Harpreet Singh Saluja, president of NITES, said in the letter.

“The IT sector in India employs lakhs of professionals and has been a pillar of our economy. If a company of TCS’ scale is allowed to carry out mass layoffs without following due process and without consequences, it will set a dangerous precedent for other companies. It will normalise job insecurity, erode employee rights and severely damage trust in India’s employment ecosystem," he added.

A week earlier, on July 22, NITES had asked the ministry to direct TCS to provide an official and time-bound commitment regarding the onboarding of about 600 lateral hires. Moneycontrol had reported on July 25 that the ministry is looking into the issue.

Experts say that the recent termination of white-collar employees in the IT sector, including at firms such as TCS, should primarily be viewed through the lens of commercial and contractual obligations, where the direct role of the labour ministry is generally limited.

"Any summons issued by the ministry, in my view, would be intended to assess whether there have been any instances of unlawful or discriminatory conduct by the firms such as targeting individuals based on age, gender or whistleblower status; or may be intended to facilitate conciliation between the firms and employees where possible," said Astha Singh Trehan, partner, Emerald Law Offices.

At its core, workforce and attrition decisions remain within the prerogative of private employers, guided by employment contracts, internal HR policies and overarching business imperatives, she added.