Tata Consultancy Services closed the second quarter of FY26 with 593,314 employees, down from 613,069 at the end of the previous quarter — a net drop of 19,755 people in three months, according to the company's own filings. That single number has triggered a dispute between the company and the IT employees' union NITES over what's actually happening inside India's largest IT services firm.

What TCS says

TCS's chief HR officer, Sudeep Kunnumal, has said the company released about 1% of its workforce — roughly 6,000 employees, concentrated at the mid- and senior-level — because they could not be redeployed into new roles after a restructuring. He has publicly pushed back on larger figures circulating on social media, calling them "very exaggerated." Importantly, TCS also hired 18,500 people in the same quarter, so the net headcount change isn't purely a story of cuts — it also reflects slower backfilling of exits against a much larger base of attrition and internal movement. This builds on a plan the company first announced in July 2025, when it said it expected to let go of around 12,000 employees, or about 2% of its workforce, mainly in middle and senior grades, as part of a shift toward AI-driven delivery models and leaner management layers.

What the union disputes

NITES president Harpreet Singh Saluja has argued that the real number of departures is meaningfully higher than what TCS has publicly confirmed. The union's case partly rests on attrition data: TCS's voluntary attrition rate fell slightly, from 13.8% in Q1 FY26 to 13.3% in Q2, even as the headcount dropped sharply. NITES argues that a falling attrition rate alongside a shrinking headcount suggests the exits were management-driven — i.e., involuntary — rather than people leaving on their own, which is harder to reconcile with the idea that most of the change came from employees who simply weren't being replaced.

Why this matters beyond TCS

TCS is a bellwether for the broader Indian IT services sector, and this isn't an isolated data point — it tracks with a wider slowdown in net hiring at India's top IT firms over FY26, driven by weaker discretionary tech spending from Western clients and the industry's push to deliver more with AI-assisted tooling and fewer people per project. The pattern across large services firms this year has consistently been the same: pressure concentrated at mid- and senior-level, non-billable, or hard-to-redeploy roles, while fresher and campus hiring has been comparatively protected.

What it means if you're in IT services

• Mid-career employees in roles with thinning project pipelines face the highest redeployment risk — staying visibly billable and cross-skilled matters more than tenure alone right now.
• Entry-level and campus hiring has held up better across the sector this year, which is worth factoring into how you advise anyone early in their career.
• If you're negotiating an internal move or a new offer in IT services, ask directly about bench time and redeployment policy — it's a reasonable question in this environment, not an alarmist one.

Read more on the dispute via Storyboard18's coverage of the NITES allegations.