Tata Consultancy Services (TCS) recently announced it would lay off 2% of its workforce—more than 12,000 employees.
While the move has sparked speculation about the role of Artificial Intelligence (AI) in replacing jobs, TCS CEO K Krithivasan has clarified that AI is not the primary reason behind the decision.
Speaking to Moneycontrol, Krithivasan said, “This is not because of AI delivering 20% productivity gains. The layoffs are due to a skill mismatch and the inability to redeploy certain employees within the company’s evolving business model.”
He explained that some employees, particularly at senior levels, are finding it difficult to transition into more technology-focused roles.
While TCS has invested heavily in AI training — over 5.5 lakh employees trained in basic AI and 1 lakh in advanced skills — reskilling has not always translated into redeployment, especially for senior professionals.
TCS is also undergoing a major structural shift, moving from the traditional "waterfall" project management model to a more agile, product-centric approach. As a result, demand for conventional project and program managers has declined.
Krithivasan acknowledged that the decision was “difficult and painful” but assured that the company would handle the layoffs with compassion.
Affected employees will receive severance packages, extended health coverage, mental health counselling, and job placement support.
