A Storm Brews in India’s IT Giant
The calm professionalism that Tata Consultancy Services (TCS) is known for was disrupted this month when news broke that India’s largest IT services company had laid off nearly 19,755 employees in the second quarter of FY26. What began as a corporate disclosure during earnings season has now snowballed into a labour controversy, with three major IT unions accusing the tech behemoth of mass “illegal retrenchments.”
The issue has sparked outrage across the technology sector, raising uncomfortable questions about job security in India’s most sought-after industry and the role of the government in protecting workers’ rights amid large-scale corporate downsizing.
The Scale of the Layoffs
TCS’s latest quarterly report showed its workforce falling from 6,13,069 to 5,93,314 employees between July and September 2025 — a net reduction of 19,755. While the company hired around 18,500 new employees during the same period, unions estimate that over 38,000 workers were effectively separated in a single quarter, either through resignations or forced exits.
This revelation triggered a joint protest statement from the Karnataka State IT/ITES Employees Union (KITU), the Association of IT Employees (AITE) in Kerala, and the Union of IT and ITES Employees (UNITE) in Tamil Nadu. The groups accused TCS of “systematic and illegal retrenchment,” and urged both state and Union governments to intervene immediately.
“Governments have failed to enforce labour laws, giving corporations like TCS a free hand to exploit employees. The Centre must act now to protect the rights and livelihoods of IT workers,” the statement read.
The Company’s Defence
TCS, however, maintains that the reports have been exaggerated.
Chief HR Officer Sudeep Kunnumal clarified on October 9 that only 1% of the company’s workforce — roughly 6,000 employees — had been affected by layoffs. He called the larger figures “misleading and not factual,” asserting that most departures were voluntary resignations, not terminations.
But unions and rights organisations like the Nascent Information Technology Employees Senate (NITES) dispute this claim. Citing TCS’s own quarterly factsheet, they highlight the clear drop of nearly 20,000 employees, far above the official number disclosed. The report also recorded an attrition rate of 13.3%, a slight decline from the previous quarter — suggesting that workforce reduction was not entirely voluntary.
Workers’ Voices and Allegations of Coercion
The unions have painted a grim picture of the internal atmosphere at TCS. Employees, they allege, were moved to the bench without notice, denied projects even after clearing interviews, and pressured to resign within hours.
Some workers reportedly faced intimidation or loss of access to digital devices during “separation meetings,” allegedly to prevent them from documenting coercion. The statement also condemned the treatment of women employees on maternity leave, claiming several were forced to return prematurely or resign if they requested extensions.
The unions further rejected TCS’s claim of providing “generous severance packages.” According to them, most departing employees have received no severance, and the company’s promise of a three-month payout was made only after public backlash.
Legal and Ethical Fault Lines
The unions argue that TCS’s acknowledgment of even 6,000 “involuntary” exits constitutes a violation of the Industrial Disputes Act, which requires prior government approval for any mass retrenchment.
“By admitting to large-scale layoffs without authorization, TCS has breached the law of the land,” the statement said, calling for immediate government intervention.
They also accused both central and state administrations of turning a blind eye to labour violations in the IT sector — a space that has often operated in a legal grey zone, exempt from traditional labour scrutiny due to its white-collar image.
The Bigger Picture: A Sector Under Strain
The controversy comes at a time when India’s IT sector faces global headwinds — from sluggish demand in Western markets to rising automation and tightening project budgets. While firms like Infosys and Wipro have already scaled down hiring, TCS’s mass retrenchment — if proven — could mark a turning point in corporate workforce management across Indian tech.
Unions warn that the “fear of another round of layoffs” is spreading rapidly among IT employees, threatening morale and productivity. They have called for a nationwide movement among IT workers to expose what they describe as unethical employment practices by top firms.
Between Efficiency and Empathy
The TCS layoffs controversy reflects a growing tension in India’s digital economy — between corporate efficiency and human empathy. As automation accelerates and global uncertainties persist, companies are trimming workforces to stay competitive. Yet, as IT unions argue, such transitions cannot come at the cost of legality or dignity.
The government now faces a crucial choice: to act as a neutral regulator ensuring fair labour practices in the high-paying IT sector, or to remain a bystander as market forces dictate livelihoods.
For an industry once hailed as India’s pride and promise, how this crisis is handled could well define the future relationship between technology, employment, and accountability in the world’s fastest-growing digital workforce.
(With agency inputs)
