Tata Consultancy Services (TCS), India’s largest IT services firm, is reworking its workforce strategy as it accelerates its focus on artificial intelligence and digital technologies. The company has seen a steady decline in overall employee numbers even as its pool of AI-trained professionals continues to grow rapidly.
In the third quarter of FY26, TCS reported a net reduction of 11,151 employees, bringing its total workforce down to 582,163 from 593,314 in the previous quarter. Since the start of FY26, the company’s headcount has fallen by nearly 30,900 employees, indicating a sustained restructuring effort.
At the same time, TCS has achieved a major milestone in capability building. The company now has more than 2.17 lakh employees trained in advanced AI skills. This talent base is actively engaged in supporting clients across areas such as generative AI automation and digital transformation.
The company has clarified that the workforce reduction is part of a planned organizational restructuring and not simply driven by weak demand or automation-led job losses. TCS has stated that it is trimming around two percent of roles, mainly at the middle and senior management levels, while gradually phasing out certain traditional outsourcing roles. This rebalancing exercise is aimed at improving efficiency and aligning the workforce with future business priorities.
Despite the reduction in overall numbers, TCS continues to invest in new talent. Hiring fresh graduates has increased, particularly for roles linked to AI cloud computing and digital platforms. Existing employees are also being reskilled through internal learning programs to help them transition into new technology-focused roles.
Employee attrition rose slightly to around 13.5 percent during the quarter compared to 13.3 percent earlier. TCS has said this remains within its normal operating range and does not signal any unusual pressure on the workforce.
Company leadership has emphasized that future growth will rely less on expanding headcounts and more on scaling advanced technologies, computing power and high-value skills. AI automation and cloud platforms are expected to be central to the company’s next growth phase.
Industry experts note that TCS’s approach mirrors a wider trend across the Indian IT sector, where companies are prioritizing skill depth over workforce size. As AI adoption gathers pace, the emphasis is shifting toward building future-ready talent rather than maintaining manpower-heavy delivery models.
The developments at TCS underline a changing reality for the IT industry. While overall job numbers may level off or decline, demand for advanced digital and AI skills is expected to rise significantly, reshaping technology careers in the years ahead.
