Tata Consultancy Services (TCS), India’s largest IT services company, has rolled out severance packages of up to two years’ salary for long-serving employees affected by its restructuring drive. The move comes at a time when a section of employees accuses the company of pursuing an ‘inhumane’ termination policy, raising questions about how India’s IT sector balances business priorities with employee welfare.

Why the cuts are happening

TCS is trimming around 2 per cent of its workforce, translating to more than 12,000 jobs, over the next year. The company says the decision is linked to shifting client demand, delays in project starts, and the growing impact of automation and artificial intelligence. Industry trends have also been weak, with global uncertainty forcing clients to cut costs and slow down decision-making.

CEO K Krithivasan has described the layoffs, which mostly affect middle and senior-level staff, as one of the toughest decisions he has faced. Most of the workforce changes were carried out in August and September, with only a few isolated cases still under review.

What the severance package offers

Employees whose skills have become redundant or who have not upskilled to match client needs are eligible for severance. The package includes:

Notice period pay: Three months’ salary across categories.

Severance pay: Between six months and two years’ salary, depending on tenure.

Bench employees: Those unallocated for over eight months get notice period pay alone.

Long service benefits: Employees with 10–15 years of service can expect up to 1.5 years of pay, while those with more than 15 years are eligible for the maximum two years.

Early retirement option: Staff nearing retirement can take early exit with full benefits, plus an additional severance payout.

Additional support for employees

Alongside the financial packages, TCS has introduced measures to help employees transition. The company is funding outplacement services, including agency fees for at least three months, to support job searches. For junior associates, this period can be extended.

Select employees are also being given access to counselling and mental health therapy under the firm’s “TCS Cares” programme. In cases where no immediate role exists, staff may be shifted to the Resource Management Group to explore new opportunities within the company.

Pushback from employees’ unions

Despite these initiatives, resentment has surfaced. The Nascent Information Technology Employees Senate (NITES) alleged that about 2,500 employees in Pune were forced to resign, and has sought the intervention of Maharashtra Chief Minister Devendra Fadnavis. TCS strongly rejected this claim, calling it “mischievous” and insisting that only a limited number of employees were affected, all of whom received due care and support.

Balancing change and care

As India’s IT sector prepares for muted growth in the financial year ahead, TCS says it is retraining and redeploying staff while managing the workforce transition with “care and responsibility.” Yet, the criticism from employee forums shows the difficulty of managing large-scale restructuring in an industry that has long been a symbol of stable employment.