Tata Consultancy Services (TCS), India's largest IT services company, reported a significant reduction in its employee headcount, dropping by nearly 20,000 in the second quarter of the financial year 2025-26. The total workforce decreased from 613,069 in the June quarter to 593,314 in the September quarter, according to Q2 FY26 data. This substantial decrease has sparked controversy, with IT workers' union Nascent Information Technology Employees Senate (NITES) accusing TCS of deliberately downplaying the scale of layoffs.

TCS CHRO Sudeep Kunnumal stated that the company laid off approximately one percent, or 6,000 employees, as part of a recent restructuring, attributing some reduction to 'involuntary attrition' due to skill mismatches, performance, and bench policies. Earlier in July, TCS had announced plans to lay off about two percent, or 12,261 employees, globally in FY26, primarily from middle and senior grades, as part of a strategy to become a "future-ready organisation" focusing on technology investments and AI deployment. The company clarified during an investor call that the 20,000 headcount reduction was a result of both voluntary and involuntary attrition.

However, NITES strongly contested TCS's figures, citing the net workforce reduction of 19,755 in a single quarter as evidence of underreporting. NITES alleged that the company's public financial disclosures "expose the truth," indicating that nearly 8,000 more employees than admitted had been removed from the rolls. The union asserted that such a discrepancy for a company of TCS's size cannot be an error but points to a deliberate attempt to mislead regulators and the public. NITES also highlighted that the reduction is alarming given that the voluntary attrition rate actually fell by 50 basis points to 13.3% in Q2 FY26, suggesting these exits were management-driven rather than voluntary. They criticized TCS for prioritizing profits over people, even as the company continued to grow revenue, and accused it of using pressure tactics to force employees to resign.

Financially, TCS reported a 1.4 percent increase in consolidated net profit, reaching ₹12,075 crore in the July-September quarter of FY2025-26. Revenues from operations grew by 2.39 percent to ₹65,799 crore, up from ₹64,259 crore in the year-ago quarter. The company's profit margin widened to 25.2 percent, an increase of 0.70 percent from the preceding quarter, excluding a ₹1,135 crore hit taken due to severance packages offered to mid-to-senior level employees.

TCS also outlined its strategic vision to become the "world's largest artificial intelligence technology services" player in the coming years. This includes an investment of over USD 6.5 billion over seven years to establish a new business entity for building a 1 GW capacity AI data center in India, for which it will scout for equity partners. Furthermore, TCS acquired US-based ListEngage, a full-stack Salesforce partner specializing in Marketing Cloud, CRM, Data Cloud, Agentforce, and AI advisory services, for USD 72.80 million. The company signed new deals worth over USD 10 billion, signaling strong demand. While India revenues declined by 33.3 percent due to the absence of BSNL revenues, the company prioritized wage hikes for 80 percent of its workforce. TCS declared a second interim dividend of ₹11 per equity share, payable on November 4, 2025.