TCS Faces Labour Ministry Summons Over 12,000 Layoffs – Will Jobs Be Saved?

India’s largest IT services company, Tata Consultancy Services (TCS), is under the government’s scrutiny after announcing a major layoff of 12,000 employees, roughly 2% of its global workforce, for the financial year 2025-26. The Ministry of Labour and Employment has summoned TCS officials on August 1, 2025, following a formal complaint from the Nascent Information Technology Employees Senate (NITES).

The sudden job cuts have triggered concern and criticism across the IT industry, especially since the layoffs are expected to affect mid- and senior-level employees with 10 to 20 years of service.

NITES Calls Layoffs “Inhuman and Illegal”

In a letter to the Labour Ministry, NITES President Harpreet Singh Saluja condemned TCS’s decision, labeling the layoffs as “inhuman, unethical, and illegal.”

• Demand: Immediate suspension of all layoffs and reinstatement of affected employees.

• Concern: Many of those impacted have long careers at TCS, raising questions about job security for senior IT professionals.

• Criticism: The union also objected to the manner in which the employees were informed about their termination.

The complaint prompted the Chief Labour Commissioner’s office to issue a summons to TCS leadership, seeking clarification and exploring possible remedies for the affected workforce.

Details of the 12,000 Layoffs

TCS confirmed that the layoffs will span FY 2025-26, affecting primarily mid- and senior-level positions.

• Total workforce reduction: Approximately 12,000 employees, equivalent to 2% of the company’s global staff.

• Impact period: April 2025 to March 2026.

• Reason cited: Company restructuring and focus on new-age technologies like AI.

In an interview with Moneycontrol, TCS CEO K. Krithivasan explained:

“We are aligning our operations with emerging technologies and operating models. While we have invested in employee reskilling and redeployment, some roles became redundant. This decision was not easy, but it is necessary for the company’s future.”

IT Sector Reacts to the Layoff Wave

The announcement has sparked anxiety across India’s IT industry, as TCS’s decision could set a precedent for other major IT firms amid a global focus on automation and artificial intelligence.

• Employees fear a ripple effect in other leading IT companies.

• Industry experts see this as part of a larger workforce restructuring to prioritize AI-driven processes and cost efficiency.

TCS: Key Financial Metrics

Despite the layoffs, TCS fundamentals remain strong:

Metric Value

Market Capitalization	₹11,04,801 Cr
P/E Ratio (TTM)	22.42
P/B Ratio	11.74
Industry P/E	25.74
Debt-to-Equity Ratio	0.10
ROE (Return on Equity)	51.24%
EPS (TTM)	₹136.19
Dividend Yield	4.13%
Book Value	₹260.08

The company remains financially robust, but the shift to AI-driven operations and cost optimization strategies are reshaping its workforce policies.

What Happens Next?

The Labour Ministry hearing on August 1 will determine if:

• TCS can justify the layoffs legally and ethically.

• Employee reinstatement or compensation measures will be mandated.

• The government will step in to regulate similar layoffs in the IT sector.

For now, the 12,000 employees facing termination remain uncertain about their future, while the IT community watches closely for the outcome of the government’s intervention.

This story highlights the growing tension between technology-driven restructuring and employee job security in India’s IT sector. Whether government intervention can save jobs will become clear after the August 1 meeting.