Shares of top Indian IT companies fell sharply on Monday after Tata Consultancy Services (TCS) announced it will cut about 12,000 jobs, which is 2% of its global workforce.
TCS said the reason for these job cuts is low spending by clients and overall economic uncertainty. The company also mentioned that the decision has nothing to do with AI or automation, but is part of a bigger change in how they do business.
TCS explained that some employees no longer fit into the current work needs, and it’s hard to reassign them to new roles because of changing client demands.
This news caused the stock market to react:
- TCS shares dropped 1.7% to ₹3,081.60.
- Wipro shares fell the most, down 3.5% to ₹250.05.
- Infosys dropped 2.2% to ₹1,482.50.
- HCL Technologies lost 1.1%.
- Tech Mahindra went down by nearly 1%.
The Nifty IT index, which tracks major IT companies, also dropped by 1.6% and is now 24% below its recent peak.
Market expert Dr. VK Vijayakumar said the job cuts are putting pressure on the IT sector, although smaller and mid-sized IT companies still show growth potential.
A report also showed that top 6 IT companies only hired 3,847 people between April and June, a big drop from the 13,935 hires in the previous quarter.
TCS Assures Smooth Transition for Affected Employees
TCS has over 6.13 lakh employees worldwide as of June 2025. The company said the layoffs will mostly affect middle and senior-level staff.
They assured that affected employees will get:
- Full notice period pay
- Severance packages
- Insurance for a certain time
- Job placement help
- Counseling and support
New “Bench Policy” Under Fire
TCS recently updated its bench policy, which has faced legal challenges. Under this new rule, if an employee is not assigned to a project, they only have 35 days to get assigned. Also, employees must have at least 225 billable working days in a year.
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