Union claims 30,000 TCS job cuts amid protests; company sticks to 12,000-role reshuffle

Tata Consultancy Services (NSE: TCS), India’s largest IT services exporter, is facing intensifying labor unrest after the Union of IT & ITES Employees (UNITE) alleged that as many as 30,000 employees could lose their jobs under an ongoing restructuring program. TCS has pushed back firmly, insisting that the real figure is closer to 12,000 roles—or about 2% of its global workforce—and that the move represents a strategic reshaping rather than a cost-cutting exercise. The dispute has triggered street protests in Chennai and other tech hubs, drawing in state regulators and additional employee unions, and sparking debate on the future of India’s IT workforce model in the era of artificial intelligence and cloud transformation.

What is UNITE demanding in the TCS layoffs protest and how widespread are the demonstrations?

The protests, led by UNITE, have quickly grown in visibility. Demonstrators have gathered in front of TCS offices in Chennai, Bengaluru, and Pune, holding placards that accuse the IT major of corporate greed and discrimination against experienced staff. Union leaders argue that long-serving employees, including team leads and project managers, are being targeted for termination, only to be replaced with fresh graduates hired at significantly lower salaries.

UNITE has framed the restructuring as a deliberate cost-arbitrage strategy, portraying it as exploitative and destabilizing to worker livelihoods. The union has even threatened to take its campaign beyond India’s borders, tapping into global labor solidarity networks and urging the Indian government to intervene. UNITE officials have also called for a formal parliamentary inquiry, contending that widespread job insecurity in the IT sector now demands national oversight.

Why does TCS insist only 12,000 jobs are affected—when unions claim 30,000?

TCS’s official narrative is more measured. In statements to the press, the Mumbai-headquartered IT giant confirmed that approximately 12,000 roles are being impacted worldwide, but stressed that the restructuring is part of its “future-ready organisation” strategy. According to the company, the exercise is designed to rebalance skill sets in fast-growing areas such as cloud services, artificial intelligence, cybersecurity, and enterprise digital transformation.

Executives have emphasized that this is not a “mass layoff” but a portfolio reshuffle—one that includes severance packages, reskilling programs, outplacement assistance, and counseling support for affected employees. TCS has also pointed to its long-standing tradition of hiring tens of thousands of freshers annually, framing the move as part of a cyclical workforce recalibration rather than a downsizing.

Still, unions have countered that the 12,000-job figure underplays the scale of the disruption. They allege that internal memos and anecdotal evidence point toward at least 30,000 staff being forced out, particularly from the mid-management ranks. This divergence between union claims and corporate assurances has fueled uncertainty among both employees and investors.

How is the Karnataka labour department responding to mass IT layoffs and what role are other unions playing?

The unrest has triggered official intervention. The Karnataka State IT/ITeS Employees Union (KITU) has lodged an industrial dispute case with the state labour department, citing potential violations of the Industrial Disputes Act. Meanwhile, the Nascent Information Technology Employees Senate (NITES), a Pune-based advocacy group, has formally petitioned the Union Labour Ministry to halt the restructuring and compel TCS to negotiate with employee representatives.

These developments highlight a shift in the traditionally union-light Indian IT services sector. Historically, IT majors enjoyed relative freedom from organized labor activity, citing the fast-paced, globalized nature of the industry. But as job security has eroded and restructuring has become more frequent, unions like UNITE, KITU, and NITES have begun to gain traction. Analysts suggest that this could mark the beginning of more structured collective bargaining in Indian IT—a change that could influence policy and investor sentiment.

What does TCS’s reshuffle signal for India’s IT workforce model and how could it affect profitability?

At its core, the restructuring is emblematic of a larger transformation in Indian IT’s labor model. For decades, outsourcing giants relied on a pyramid-shaped workforce: a vast base of freshers, a significant mid-tier of project leads, and a smaller executive layer. Analysts now argue that companies like TCS are gravitating toward a “diamond-shaped” model—leaner in the middle, with greater reliance on automation, AI-driven project delivery, and specialized cloud engineers.

If fully implemented, this shift could reduce employee costs by an estimated 3% to 4%, which in TCS’s case equates to as much as 12% of its FY25 net profit. While this may please shareholders, it also creates social and political friction, as tens of thousands of middle-career IT professionals face displacement. Investor commentary in the aftermath of the protests reflects a mixed outlook: while cost discipline and sharper margins are welcome, reputational risks and prolonged unrest could slow client engagement and increase attrition.

How are employees, investors, and analysts reacting to the widening gap between TCS and its unions?

Employee voices captured in media reports and social media platforms reveal a climate of fear and distrust. Some allege that performance evaluations are being used as a tool to justify exits, while others accuse TCS of withholding dues owed upon termination. In Pune, one dismissed employee staged a street-side demonstration demanding unpaid wages, further amplifying the controversy.

From an institutional perspective, analysts remain divided. Some interpret the reshuffle as a necessary modernization step, aligning TCS with global competitors such as Accenture and IBM, which have also trimmed staff to adapt to AI-driven workflows. Others warn that heavy-handed job cuts risk alienating both employees and clients, undermining long-term growth in a sector built on reputation and trust.

For investors, the immediate focus has been on stock sentiment. TCS shares have remained relatively stable in the short term, buoyed by the company’s strong balance sheet and robust pipeline of digital transformation contracts. However, foreign institutional investors (FIIs) have reportedly adopted a cautious stance, trimming exposure slightly while awaiting clarity on the scale of the layoffs and potential regulatory fallout. Domestic institutional investors (DIIs), on the other hand, have largely held their positions, signaling confidence in TCS’s long-term fundamentals despite near-term turbulence.

What lies ahead for TCS, its workforce, and the broader Indian IT sector?

The TCS layoffs dispute is shaping up as a watershed moment for India’s IT sector. On one side is the push for agility, automation, and cost efficiency in an increasingly competitive market. On the other is the human cost of transformation, with unions and employees demanding a greater voice in corporate decision-making.

For TCS, the next few months will be critical. Observers suggest that proactive engagement with unions, transparent disclosure of workforce data, and a credible reskilling plan could help restore trust. At the same time, the episode may accelerate calls for formal labor protections in IT, a sector that has long operated outside the traditional frameworks of India’s industrial relations laws.

Looking forward, the balance between technology-led efficiency and employee security will be closely watched—not only by investors and employees, but also by policymakers seeking to maintain India’s reputation as a global outsourcing powerhouse. If TCS can navigate this storm effectively, it may set a template for others. If not, the fallout could embolden unions, spark regulatory intervention, and fundamentally reshape the IT services landscape.