New Delhi: Tata Consultancy Services (TCS) has reported one of its sharpest quarterly workforce contractions, with nearly 20,000 employees exiting in the second quarter of FY26. As reported by The Tribune, the company’s headcount fell to 5,93,314 on September 30 from 6,13,069 at the end of June; a net reduction of 19,755 employees.

The number is 66% higher than the layoffs TCS had projected earlier. In July, the country’s largest IT services exporter had said it would cut about 2% of its workforce, or around 12,000 employees, as part of a phased restructuring. The actual fall suggests a sharper-than-expected correction.

As reported by the Business Standard, Sudeep Kunnumal, the newly appointed chief human resources officer, explained the reduction in a late evening investor call. “The 20,000 headcount reduction is a factor of voluntary and involuntary attrition,” he said, adding that about 6,000 employees were “released” as part of involuntary exits. He also noted that the company was “halfway through” its estimated workforce rationalisation.

According to Business Standard, TCS also booked a restructuring cost of Rs 1,135 crore in the September quarter linked to severance payouts, underlining the scale of the exercise. Analysts view the sharper contraction as part of the company’s strategy to rebalance costs, sharpen focus on higher-value services, and align with changing demand.

The reduction comes amid slowing global IT spending, tighter client budgets, and a pivot towards generative AI and automation. While TCS has not clarified its campus hiring and fresh recruitment plans for the year, the dip signals muted job creation and highlights the pressures facing the broader $250-billion IT sector.

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