The country’s largest IT services company, Tata Consultancy Services (TCS), has reported a decline in its headcount for the second consecutive quarter, reviving concerns over job security in the IT sector. The company sacked 11,151 employees during the October–December 2025 quarter (Q3 FY26). Earlier, TCS had reduced its workforce by 19,755 employees in the September quarter.
With a cumulative reduction of over 30,000 employees in just two quarters, questions are being raised about the broader employment scenario in the IT industry. According to data released by the company, TCS’s total headcount stood at 5,82,163 at the end of the December quarter, down from 5,93,314 in September, bringing its workforce below the six-lakh mark. Meanwhile, the voluntary attrition rate in IT services remained unchanged at 13.5%, which, although stable, continues to be relatively high.
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TCS management said the job cut is not part of a large-scale layoff exercise but is linked to efforts to improve utilisation and optimise talent deployment. TCS CEO K. Krithivasan said the company is focused on transforming itself into the world’s largest AI-led technology services firm. He added that TCS’ AI services are now generating annual revenues of $1.8 billion, driven by sustained investments in infrastructure and intelligence.
TCS Results
On the financial front, TCS’ consolidated revenue in Q3 FY26 rose 2 per cent quarter-on-quarter and 4.9 per cent year-on-year. Revenue in dollar terms stood at $7.5 billion, though it saw a marginal year-on-year decline.
The company reported operating and net margins of 25.2 per cent and 20 per cent, respectively, during the quarter. Cash flow from operations exceeded 130 per cent of net profit.
TCS also indicated some improvement in demand conditions. The number of clients generating over $100 million in revenue increased, while the order book for the quarter stood at $9.3 billion, with a significant contribution from North America and the BFSI sector.