TCS Headcount Falls by 30,000+

Tata Consultancy Services (TCS) has reported a sharp reduction in workforce for the second quarter in a row, raising fresh concerns about an IT sector job crisis in India. By the end of Q3 FY26, TCS’s total headcount stood at 582,163, down 11,151 employees from 593,314 in the previous quarter.

What makes this trend stand out is that it follows an even steeper cut in Q2 FY26, when TCS reduced its workforce by 19,755 employees (from 613,069 in Q1 FY26 to 593,314 in Q2). In just two quarters, the company’s headcount shrank by more than 30,000, putting the spotlight back on IT hiring slowdowns and the future of tech employment.

Why are IT companies cutting headcount?

Industry voices in the article point to a combination of cyclical pressure and long-term structural change. One key factor is a global slowdown: over the last 12–18 months, clients in the US and Europe (which account for nearly 70% of India’s IT revenue) have reduced technology spending due to high interest rates and geopolitical uncertainty.
This pullback has hit large transformation programs too, spending on digital transformation projects, legacy upgrades, and new initiatives has reportedly declined 15%–20% across sectors like banking/finance and retail. At the same time, lower attrition has reduced replacement hiring; attrition in Indian IT firms fell from about 20%–22% in FY22 to around 11%–13% in FY25, leading to weaker net additions.

The shift is structural, not temporary

Beyond demand cycles, the article highlights a deeper shift: companies are moving toward “structural” workforce reduction rather than treating layoffs as a short-term response. Firms are adopting automation, new technology, and vertical solutions to improve efficiency and eliminate roles that are no longer needed.

AI and automation are also changing team structures, new tools are delivering 20%–30% efficiency gains in tasks like testing, application maintenance, and documentation, which reduces the need for large project teams even when demand returns. Margin pressure also plays a role, with Tier-1 firms aiming for EBIT margins of 24%–26% and staying cautious on hiring to protect profitability.

Which jobs are most impacted (and which are safer)?

The most visible pressure is at entry and junior levels, where entry-level hiring has been cut by nearly 30%–40% according to one expert cited in the piece. The article also flags growing pressure on mid-level engineers and support roles tied to traditional technologies.
However, demand remains stronger in specialized areas like cloud computing, cybersecurity, data engineering, AI governance, and cloud architecture, while senior roles tied directly to delivery and revenue are described as largely unaffected. The message for early-career professionals is blunt: basic coding skills may no longer be enough, and upskilling into AI coding, cloud-native tech, cybersecurity, data analytics, and domain consulting is increasingly important.

Not everyone is shrinking: Infosys shows a different path

While TCS reduced headcount sharply, Infosys moved in the opposite direction, adding 5,043 employees in Q3 FY26, its sixth straight quarter of headcount growth. The article also notes Infosys has hired around 18,000 freshers so far and aims to onboard 20,000 in FY26, per CFO Jayesh Sanghrajka.

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