TCS Reports Significant Decrease in Workforce for FY2026
Workforce Reduction Details
Tata Consultancy Services (TCS), India’s leading IT services firm, experienced a notable decline in its workforce by nearly 24,000 employees during the fiscal year 2026 (FY2026). The company’s headcount at the conclusion of the fourth quarter was recorded at 584,519, reflecting a decrease of 23,460 compared to the previous year.
Sudeep Kunnumal, the Chief Human Resource Officer (CHRO) of TCS, clarified that the entire reduction in headcount cannot solely be attributed to restructuring efforts implemented last year. He emphasized that the firm has made significant progress in its hiring initiatives, having already extended 25,000 campus job offers as part of its ongoing recruitment strategy. TCS is also on target to employ around 40,000 fresh graduates annually, despite the recent headcount decline.
Last year, TCS onboarded 44,000 trainees and intends to maintain its position as one of the largest recruiters in the Indian job market, as explained by Kunnumal in a conversation with media outlet TOI.
Hiring and Restructuring Updates
In addition to the overall reduction, TCS reported a sequential increase of 2,356 employees through both lateral hiring and fresh graduates. However, the company did not disclose any specific hiring targets for the upcoming fiscal year 2027.
TCS has announced the completion of its layoff cycle, following a previous statement indicating that it intended to reduce its workforce by 2% while tightening its bench policies—a decision that also triggered voluntary resignations primarily from mid-to-senior level employees. The company confirmed that the restructuring exercise has come to a close.
Industry Perspectives on AI and Future Growth
In response to recent assertions predicting a decline of the IT services industry by 2030, TCS CEO K Krithivasan countered these claims, suggesting that enterprises will increasingly depend on companies like TCS to fully harness the benefits of artificial intelligence (AI). Furthermore, TCS’s Chief Operating Officer Aarthi Subramanian remarked on the notable gap between the development of AI technologies and their practical implementation within enterprises, indicating that this presents new opportunities for growth.
Krithivasan acknowledged the company’s observed decline but reassured stakeholders that the situation is not alarming and expressed optimism regarding future growth. He reported that the initial quarter experienced a decline due to the conclusion of a significant transformation program; however, subsequent quarters indicated a return to growth momentum.
Financial Performance Summary
In terms of financial performance, TCS recorded a 12% increase in net profit, amounting to ₹13,718 crore for the March quarter, along with a 9.6% rise in revenue to ₹70,698 crore. Sequentially, profit grew by 19.4% with revenue increasing by 5.4%. These results surpassed expectations after several quarters of relatively flat growth, aided by a favorable exchange rate and successful large deal acquisitions.
Despite these positive indicators, TCS also reported its first annual revenue decline since its public listing, with a decrease of 2.4% in constant currency terms for FY26. The company reported its highest net margin in the last four years, with AI-related revenue surpassing $2.3 billion.
During the fourth quarter, TCS secured three major contracts, contributing to its record total contract value (TCV) of $40.7 billion for FY26. AI services revenue notably increased to $2.3 billion in the March quarter, up from $1.8 billion in the December quarter and $1.5 billion in the September quarter.
As the company prepares for future endeavors, TCS signed contracts with OpenAI and AMD focused on the development of data centers utilizing AI technology. The operating margin, a crucial performance metric, rose to 25% in FY26, marking its highest level in four years.
