India’s largest IT services firm, Tata Consultancy Services (TCS), trimmed a significant number of its employee base for the second quarter in a row during
the October–December period of the financial year 2026, reflecting a cautious approach to staffing amid uneven global demand. The Mumbai-based firm ended the December quarter with a workforce of 582,163 employees, down from 593,314 at the end of September. This translates into a net reduction of 11,151 employees over the three months. In the preceding quarter, TCS had reported an even sharper decline, with 19,755 employees exiting, pushing the company’s total headcount below the six-lakh mark, according to the exchange filing on Monday, January 12. Second Straight Quarter Of Workforce Rationalisation The continued reduction highlights the company’s focus on improving utilisation levels and optimising talent deployment. TCS said its voluntary attrition rate over the trailing 12 months stood at 13.5 per cent in IT services, broadly in line with the September quarter. The trend suggests that while employee churn has stabilised, the company is calibrating hiring and retention in line with current business conditions rather than expanding aggressively. Management has previously indicated that workforce decisions are being driven by project requirements and efficiency goals, especially as clients remain selective with technology spending. AI Push Gains Momentum Despite Cautious Demand Even as headcount declined, TCS underscored progress in its artificial intelligence-led offerings. “We remain steadfast in our ambition to become the world’s largest AI-led technology services company, guided by a comprehensive five-pillar strategy. Our AI services now generate $1.8 billion in annualised revenue, reflecting the significant value we provide to clients through targeted investments across the entire AI stack, from infrastructure to intelligence,” said chief executive officer K Krithivasan. Financial Performance And Deal Pipeline Hold Firm TCS announced its third-quarter FY26 results after market hours on Monday. Consolidated revenue rose 2.0 per cent sequentially and 4.9 per cent year-on-year. In dollar terms, revenue came in at $7.5 billion, up 0.6 per cent quarter-on-quarter but marginally lower by 0.4 per cent from a year ago. On a constant currency basis, revenue increased 0.8 per cent sequentially while declining 2.6 per cent year-on-year. Operating margin for the quarter was reported at 25.2 per cent, with net margin at 20.0 per cent. Cash flow from operations remained robust, amounting to 130.4 per cent of net profit. On the demand side, TCS added more large clients during the quarter. The number of $100-million-plus customers increased by two, $20-million-plus clients rose by eight, and $1-million-plus clients grew by 23. The total contract value of deals signed during the quarter stood at $9.3 billion, led by North America, BFSI, and the consumer business.
