TCS offers two-year severance pay amid workforce restructuring shift
MUMBAI, INDIA — India’s largest IT services company, Tata Consultancy Services (TCS), is offering severance packages of up to two years’ salary to long-serving employees as part of a major workforce restructuring effort aimed at adapting to rapid technological shifts and evolving client demands, according to a report from Moneycontrol.
TCS ranked #8 in the OA500 2025, an objective index of the world’s top 500 outsourcing companies.
Workforce restructuring to meet AI, automation demands
TCS’s latest workforce program marks one of its most significant employee transitions in years.
According to Moneycontrol, the company plans to reduce its global workforce by approximately 2%, or more than 12,000 employees, over the next year. The move is part of an initiative to “realign skills” in response to the demands of automation, artificial intelligence, and evolving client needs.
The reductions primarily target employees whose roles have become redundant or whose skills have not kept pace with the company’s evolving requirements. Sources told Moneycontrol that affected employees will receive three months of notice pay and severance packages ranging from six months to two years’ salary, depending on their tenure.
Those who have served for over 15 years are eligible for the full two-year payout, while employees with 10 to 15 years of service may receive around 1.5 years’ worth of pay.
TCS Chief Executive K. Krithivasan acknowledged in July that the restructuring decision was “one of the toughest” he had made, noting that it would mostly affect mid- and senior-level employees. Most workforce adjustments were reportedly completed in August and September, with some remaining cases still under review.
Employees who have been “on the bench” without client assignments for over eight months are also being considered for redeployment through the company’s Resource Management Group.
TCS adds career, mental health support for affected staff
Beyond financial compensation, TCS is extending several forms of support to help affected employees transition smoothly. The company is covering outplacement agency fees for up to three months to help workers find new roles. Junior associates, in particular, may receive extended support.
In addition, TCS is providing access to mental health resources through its “TCS Cares” program, which funds therapy sessions for employees navigating the changes. For those nearing retirement, early retirement options have also been extended, along with full retirement benefits, including insurance coverage and tenure-based severance packages.
“In keeping with the values of our company, those affected by our recent initiative to realign skills have been provided care and support that is due to them in each of the individual circumstances,” TCS said in a statement to NDTV Profit.
Automation, AI reshape global IT outsourcing strategies
TCS’s restructuring reflects a wider recalibration across the global outsourcing and IT services industry. As automation and AI adoption accelerate, companies are redefining workforce strategies to focus on reskilling, efficiency, and future-ready competencies.
While such transitions can be painful in the short term, they also highlight how legacy service providers are adapting to maintain long-term competitiveness in a rapidly evolving digital economy.
