India’s largest IT services firm, Tata Consultancy Services (TCS), is offering severance packages of up to two years’ salary to some employees as part of its ongoing restructuring, according to a report by Moneycontrol.

The move comes as the company faces shifting client demands and doubles down on its artificial intelligence (AI) push.

Sources quoted in the report said the packages are being extended to long-serving employees whose roles no longer fit into TCS’s future plans.

Layoffs and resignations

The restructuring has revived concerns over job security in India’s $245-billion IT industry. Nearly two months after reports suggested that TCS would cut around 2 per cent of its workforce, or over 12,000 jobs, the impact is beginning to show.

The National Information Technology Employees Senate (NITES) alleged in a letter to the Maharashtra Chief Minister that TCS had forced about 2,500 employees in Pune to resign.

TCS, however, downplayed the scale of the cuts. In a statement, the company said only a “limited number of employees have been affected by our recent initiative to realign skills in our organisation.”

Who is most affected?

According to Moneycontrol, the layoffs are hitting employees whose skills have become redundant or those who have not upskilled in line with evolving client requirements.

While the severance packages may soften the blow for some, the developments underline a clear industry trend: IT companies are restructuring to prioritise AI, automation, and newer technologies, leaving those without updated skills vulnerable.