By: Bharat Daily Samachar Date: 2 October,2025

TCS Restructuring: A Bold and Unprecedented Move

Tata Consultancy Services (TCS), India’s largest IT services exporter, has unveiled a workforce restructuring plan that has sent ripples across the technology industry. In an unexpected yet significant gesture, the company has announced that employees who are affected by the restructuring will receive a severance package of up to 24 months’ salary.

This comes at a time when the global IT services market is experiencing sluggish growth due to rising inflation, cost-cutting by clients, and an uncertain macroeconomic environment. For a company as large and stable as TCS, the move signals both the depth of the challenge and a commitment to handling it with sensitivity.

Why is Restructuring Happening Now?

Like other IT giants, TCS is grappling with changing business models and technological shifts. The rise of automation, cloud services, and artificial intelligence (AI) has reduced the need for large teams to manage traditional IT processes.

Moreover, several global clients are tightening budgets, delaying new projects, and renegotiating outsourcing contracts. This slowdown has pushed IT service providers to optimize their workforce and refocus on areas such as AI-driven solutions, cloud transformation, and cybersecurity.

TCS, with its vast employee base of over 600,000, has decided to restructure teams and rationalize roles to remain competitive in this shifting landscape.

Severance Pay: A Humane Approach in Tough Times

While job losses are never easy, what sets this announcement apart is the generous severance package. Impacted employees could receive up to two years of pay, depending on their role, tenure, and grade.

Industry analysts note that this is among the most generous severance benefits offered by any Indian IT company in recent years. Typically, companies in the sector provide three to six months of severance at best. By offering such an extended cushion, TCS is signaling its intent to protect its employees’ financial stability as they transition to new opportunities.

A senior executive familiar with the matter said, “Restructuring was inevitable, but TCS wanted to ensure that people who have contributed to its growth are not left stranded. The extended severance pay is meant to give employees breathing space and financial security.”

Impact on Employees and Morale

The announcement has triggered mixed emotions within the workforce. While some employees are naturally anxious about potential role redundancies, others view the severance package as a rare act of corporate empathy in difficult times.

An employee from the Bengaluru office shared, “Job loss is hard, but knowing that the company will support us financially for such a long period makes a huge difference. It gives us time to plan the next step rather than panic.”

Industry Experts Weigh In

Market experts believe TCS’s move could set a benchmark for the IT industry in India. With several global and Indian tech firms also resorting to layoffs in the past two years, the approach of providing extended severance could reshape expectations for employee treatment during crises.

“Indian IT companies have traditionally not been known for large severance packages. What TCS has announced is a game-changer. It sends a strong message about valuing people, even when parting ways,” said HR consultant Ramesh Iyer.

Financial Considerations

While offering up to two years’ pay will certainly weigh on the company’s balance sheet in the short term, analysts argue that the move is strategic. By absorbing the cost now, TCS may safeguard its reputation as an employee-friendly employer, thereby making it easier to attract top talent in the future.

Additionally, TCS has consistently reported strong revenues and profits, making it one of the few IT firms in India capable of absorbing such expenses without destabilizing its financial position.

What This Means for the IT Sector

The restructuring at TCS reflects a broader trend across the global IT industry:

• Automation and AI are reducing dependence on manpower-heavy models.

• Cloud migration is reshaping traditional service contracts.

• Geopolitical uncertainties and client budget cuts are slowing project inflows.

Other IT firms in India may soon announce similar restructuring measures, though it remains to be seen whether they will match TCS’s generous severance policy.

Looking Ahead

For employees, this development is both a challenge and an opportunity. While some roles may be lost, TCS is expected to create new opportunities in areas such as data science, AI, cloud solutions, and digital consulting.

In fact, sources indicate that TCS will simultaneously reskill and redeploy a large portion of its workforce to emerging technologies. This dual approach of restructuring and reskilling could serve as a blueprint for how IT firms adapt to the digital era.

Conclusion

The decision by Tata Consultancy Services to offer up to two years of severance pay as part of its restructuring process stands out as an unusual yet compassionate corporate move. In an era where layoffs often lead to financial turmoil for employees, TCS’s approach balances business realities with social responsibility.

As the IT industry navigates a period of transformation, this decision could redefine how companies manage workforce transitions. For now, TCS has not only demonstrated leadership in the business domain but also set an ethical benchmark that the wider corporate world will find hard to ignore.