TCS Offers Up to Two Years’ Severance Pay Amid Workforce Restructuring

What's Happening?

Tata Consultancy Services (TCS) is offering severance packages of up to two years’ salary to long-serving employees whose skills no longer align with company needs. This move is part of a broader workforce restructuring effort aimed at adapting to shifting client demands and increasing automation. Approximately 2% of TCS's workforce, or over 12,000 employees, will be affected by this restructuring. Employees whose skills have become redundant or who have not upskilled to meet evolving requirements are eligible for severance packages ranging from six months to two years’ salary, depending on their tenure.

Why It's Important?

The restructuring at TCS highlights the impact of technological advancements and automation on employment within the IT sector. By offering substantial severance packages, TCS aims to support affected employees during their transition. This move reflects the company's commitment to maintaining agility and competitiveness in a rapidly changing industry. The restructuring may prompt other IT firms to reassess their workforce strategies and invest in upskilling programs to align employee skills with future demands. The decision underscores the importance of continuous learning and adaptation in the tech industry.

What's Next?

TCS will continue to evaluate employees without active roles, offering options to move into the Resource Management Group to explore new opportunities within the company. The restructuring process, largely completed by September 2025, may lead to further adjustments as TCS adapts to market changes. The company is also providing support for career transitions through outplacement services and mental health resources. As the industry evolves, TCS and other IT firms may increase their focus on training and development programs to ensure their workforce remains competitive.