TCS has made it clear that its workforce trimming is not over yet. The country’s largest IT services company has now signalled that more exits are coming in the March quarter as it moves toward a planned 2% reduction in headcount.
During its Q3 earnings call, senior executives confirmed that the company is only halfway through its current round of involuntary attrition. Sudeep Kunnumal, VP and chief human resources officer TCS, told analysts that the company has so far completed around 1% of the planned cuts, with the rest expected to play out over the coming months.
“We estimate it to be approximately 2%. We are currently at 1%, and we will continue to evaluate people whom we can redeploy. The ones we are not able to re-deploy; those are the people that we will release,” Kunnumal said.
This puts a clear marker on Q4. TCS will continue to assess employees, particularly at the mid and senior levels, and move out those who do not fit into the company’s evolving delivery model.
In Q3, TCS reported a net decline of around 20,000 employees, which translates to about 3% of its total workforce. Management clarified that this number includes both voluntary exits and forced separations. The involuntary portion so far stands at roughly 1%, which now means another 1% is still to come.
When asked directly if there would be no more forced exits beyond the 1% already executed, Kunnumal was blunt in his reply. He told analysts, underlining that the company is still in the middle of the exercise.
The company framed the layoffs as a byproduct of a larger reskilling and redeployment effort. Over the last year, TCS has invested heavily in training employees for AI, cloud, and digital roles. But it has also found that not everyone, especially at higher levels of seniority, is able to transition into these new roles.
“That is where we find certain mid and senior level people are not able to find the right role based on their seniority. Those are the ones that we will release with a lot of care,” Kunnumal said.
TCS ended the December quarter with 5,82,163 employees, down 11,151 from the previous quarter, even as it sharply expanded its pool of AI-trained staff and posted steady financial performance.
The company reported revenue of ₹67,087 crore for Q3 FY26, up 2% quarter-on-quarter, and net income of ₹13,438 crore, an increase of 8.5% year-on-year. Operating margin stood at 25.2%, while annualised AI services revenue rose to $1.8 billion, up 17.3% sequentially on a constant-currency basis.
The decline in overall headcount highlights how TCS is reshaping its workforce as it moves toward AI-led delivery. Even with fewer employees on the rolls, the company said it now has more than 2,17,000 associates with advanced AI skills working across client projects.
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