TCS workforce falls below 6 lakh for the first time in over three years

Tata Consultancy Services (TCS) has seen its total workforce fall below the six-lakh mark for the first time in over three years, as India’s largest IT services firm accelerates its shift towards artificial

intelligence (AI) and automation.

At the end of the September quarter (Q2 FY26), TCS reported 593,314 employees, marking a sequential decline of 19,755, or 3.2%, from the previous quarter. Voluntary attrition in the IT services segment stood at 13.3% over the past 12 months.

The company’s headcount has been declining from a record 614,795 at the end of FY23, which fell to 601,546 in FY24. A slight increase to 607,979 in March 2025 was followed by a sharp reduction amid ongoing restructuring.

During the quarter, TCS recorded a one-time restructuring expense of ₹1,135 crore, providing termination benefits in line with company policy.

In July, TCS had announced plans to cut approximately 12,000 roles, or 2% of its workforce, reflecting both technological transitions and a declining relevance of certain skillsets in the AI era. Employee costs for the quarter stood at ₹38,606 crore, forming 58.7% of total revenue of ₹65,799 crore, compared with 59.5% in the June quarter and 57% a year earlier.

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On the business front, constant currency revenue rose 0.8% sequentially, reversing declines from the previous two quarters. While net profit of ₹12,075 crore came slightly below estimates due to restructuring costs, revenue and operating margins beat CNBC-TV18 projections. EBIT margins expanded 70 basis points to 25.2% from 24.5% in the previous quarter.

TCS also announced plans to bolster AI capabilities, including the creation of a new business entity to build AI infrastructure and a proposed 1GW-capacity AI data centre over the next seven years. The company acquired ListEngage for up to $72.8 million, excluding management incentives and costs, to strengthen its Salesforce capabilities.

Ahead of the results announcement, TCS shares closed 1.1% higher at ₹3,061.70 on the NSE, extending a two-session gain to nearly 3%, compared with a 0.3% rise in the Nifty50 over the same period.