English
English
English
Is India’s largest IT company preparing for an AI-driven transformation? Here’s why TCS is offering hefty severance pay ranging from six months to two years’ salary- to thousands of mid- and senior-level staff.
TCS sets 6 month's pay as minimum severance
New Delhi: In a significant move signaling an internal transformation, Tata Consultancy Services (TCS) has introduced a tiered severance package impacting around 12,000 employees, primarily at the mid and senior levels. The restructuring comes as the IT services major shifts focus towards artificial intelligence, data analytics, and cybersecurity, phasing out roles that cannot be redeployed in its new operational model.
The decision, which has ignited widespread debate on social media, marks one of TCS’s most extensive realignment efforts in recent years.
More than 12,000 employees will lose jobs in TCS; AI has taken their place
According to reports, the severance policy extends across various employee categories, from those on the bench or lacking new-age tech skills to long-serving staff with over 15 years of experience.
Employees whose skills have become redundant were offered a three-month notice period pay plus a severance package ranging from six months to a year’s salary, depending on their tenure. TCS has set six months’ pay as the minimum payout under the plan.
To assist affected staff in finding new opportunities, TCS is covering outplacement agency fees for up to three months, extending that period for junior associates.
In addition, the company continues to provide mental health assistance through its TCS Cares program, which funds short- to medium-term therapy sessions for impacted employees.
TCS to offer minimum severance of 6 months’ pay for laid-off employees
Those who have remained unallocated for over eight months will continue to receive standard three-month notice pay, as per media reports.
Employees approaching retirement have been given the option of early retirement with full access to insurance and retirement benefits, in addition to extra severance compensation ranging from six months to two years’ salary, depending on years of service.
TCS to lay off over 12,000 employees in FY 2026 amid strategic shift to AI
TCS has also structured payouts based on tenure- employees with 10 to 15 years of experience are entitled to 1.5 years’ salary, while those serving over 15 years receive two years’ pay.
Industry experts suggest that TCS’s decision aligns with its long-term strategy to strengthen AI and cybersecurity capabilities, requiring a reskilled and agile workforce. By introducing structured severance and support mechanisms, TCS aims to balance innovation with employee welfare, minimizing disruption as it transitions into a more tech-driven future.
A severance package consists of compensation and benefits given to an employee when their employment ends, usually due to layoffs, company restructuring, or position elimination. It often includes a payment based on the employee’s tenure, reimbursement for unused vacation or sick days, extended health insurance, and sometimes support with finding a new job.
Additionally, it may come with agreements such as non-disclosure or non-compete clauses. Although not always mandatory by law, companies frequently offer severance packages to maintain positive relations and reduce legal risks. These packages can often be negotiated, particularly for higher-level employees.
