On July 27, 2025, Tata Consultancy Services marked a significant strategic shift. Project Fluidity, aimed at making the company leaner, more agile, and AI-first, was a pivotal moment in TCS's journey towards AI transformation.
India's largest IT services provider, Tata Consultancy Services (TCS), announced that it will lay off approximately 2 per cent of its workforce, or 12,260 employees. This move, with its profound human implications, poses a deeper challenge: Can companies like TCS truly balance their drive for efficiency and AI-driven agility with genuine respect for the human cost?
As part of Project Fluidity, TCS plans to place senior managers or consultants on the bench if their performance is deemed unsatisfactory.
"TCS is on a journey to become a Future-Ready organisation. This includes strategic initiatives on multiple fronts, including investing in new tech areas, entering new markets, deploying AI at scale for our clients and ourselves, deepening our partnerships, creating next-gen infrastructure, and realigning our workforce model," said the company in a statement.
The TCS announcement highlights the challenges facing Indian IT services, including a slowing economy, geopolitical tensions, tariffs, and a potential downturn in the North American market. These are worsened by artificial intelligence, specifically, generative AI and agentic AI, which aim to boost efficiency and productivity by doing more with less.
TCS also stated that several reskilling and redeployment efforts are underway as it seeks to be future-ready. "We will release associates whose deployment is not feasible. This will affect approximately 2 per cent of our workforce, primarily at the middle and senior levels, over the year. The transition is planned to avoid any service disruption to clients,” the company said.
At the end of Q1 FY2026, TCS had a headcount of 613,069. CEO Krithivasan emphasised that layoffs will primarily affect middle management and senior staff, rather than junior employees. He clarified that artificial intelligence is not the direct cause, stating, “This is not due to AI, but to prepare for future skills. It concerns the feasibility of deployment, not about needing fewer people.” The company's commitment to offering severance pay, a notice-period salary, extended health insurance, and outplacement assistance reassures the affected employees of TCS's support.
Commenting on the company’s revised approach to bench management, where unassigned employees wait for new projects, Krithivasan said, “It’s not an efficiency drive. We want to ensure that associates can seek projects and remain productive throughout the year. This is more to put a positive pressure and incentive for them to be allocated and be engaged in client projects.”
Analysts say AI is quietly changing industry demand. As automation reduces the need for roles like manual testing, many experienced workers struggle to adapt. This problem isn’t unique to TCS. In recent years, major companies have reduced staff and implemented AI automation. Few have addressed it openly.
The Anatomy of Project Fluidity
Project Fluidity isn’t merely a cost-cutting exercise. It’s TCS’s blueprint for transforming legacy processes, unifying data pipelines, and embedding generative AI across client offerings—all as part of a broader push to redefine the balance between innovation and humane workforce management. In theory, a sleeker organisation means faster decision-making, a more potent competitive edge, and greater innovation velocity. In practice, it raises questions:
- Can AI truly replicate the nuanced judgment of seasoned consultants?
- What safety nets are in place for those displaced?
The Human Dimension: Beyond the Numbers
Every layoff statistic conceals real people grappling with uncertainty. For many, a career at TCS provided stability and opportunities for upward mobility. Redundancy notices now disrupt families, mortgage plans, and personal identities—consequences that underscore the urgent need to clarify whether TCS’s AI transformation can be done without disregarding its human impact. We must consider:
- The Role of Upskilling Programs versus Severance Packages.
- Corporate accountability in ensuring smooth transitions.
As organisations become more agile with AI, a deeper challenge emerges: Can automation also support empathy?
AI-led workforces stress speed and scale. But agility means more than algorithms. True fluidity needs:
- Balancing data-driven insights with human creativity.
- Designing AI tools that augment, not replace, human intuition.
Without this holistic approach, firms risk simply trading one bottleneck—bureaucracy—for another: a cold, metrics-only mindset that overlooks the central question of whether genuine progress comes at the expense of empathy.
India’s IT Giants at a Crossroads
TCS’s move signals a broader industry reckoning. As competitors like Infosys and Wipro explore their own AI roadmaps, India’s software services model faces pressure to evolve beyond billable hours. This crossroads presents both peril and possibility, and challenges all players to clarify: can digital progress be achieved without compromising empathy for their workforce?
- Possibility: New high-value offerings, domestic R&D hubs, and a leap toward digital sovereignty.
Navigating Ethical AI Adoption
Adopting AI at scale demands guardrails. Ethical considerations must guide every deployment:
- Transparency: Clear communication with clients and employees on AI’s role.
- Fairness: Auditing algorithms to prevent bias against any group.
- Human oversight: Ensuring final decisions rest with accountable individuals.
Prioritising these principles transforms AI from a cost centre into a trust engine.
Toward a Balanced Future of Work
The TCS episode compels us to imagine alternative paths. What if companies invested as heavily in retraining as they do in new software? How might collaborative models—where employees share in productivity gains—reshape corporate-worker relations? At the edge of an AI revolution, the central challenge is to define actual progress and determine who gets to shape that future, without losing sight of the human cost.
