TCS headcount fall driven more by hiring slowdown than restructuring exits

Tata Consultancy Services’ (TCS) shrinking workforce over the last two quarters appears to be driven less by its much-discussed restructuring exercise and more by a pronounced slowdown in hiring, according to a reading of the company’s own numbers.

Between the September and December quarters, India’s largest IT services firm saw its employee base contract by close to 30,000. During the same period, TCS disclosed that around 7,800 employees were released as part of an ongoing workforce review, leaving a significant gap that points to exits outside the restructuring framework.

The difference suggests that more than 22,000 employees left due to routine attrition, voluntary exits or other operational reasons, rather than targeted workforce rationalisation.

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Addressing analysts earlier this month, TCS chief human resources officer Sudeep Kunnumal said the company continues to recruit selectively from campuses and the lateral market, while releasing employees only when redeployment options are exhausted. He added that approximately 1,800 employees were released in the December quarter following due process.

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TCS’ own data supports that view. Attrition rose only marginally to 13.5 percent in the December quarter, even as the workforce continued to shrink. The company has repeatedly framed its restructuring as a continuous process rather than a one-off action, while also pointing to productivity gains from artificial intelligence as a factor reshaping workforce needs.

How peers compare

HCLTech, which reported its quarterly numbers on the same day as TCS, showed a more stable headcount trajectory. While its total employee base dipped slightly in the December quarter, the company continued onboarding freshers, indicating a more balanced hiring and exit cycle.

HCLTech added 2,852 freshers during the quarter, following higher onboarding in the first half of the year. However, the company does not disclose details of employee releases, limiting direct comparisons with TCS’ restructuring disclosures.

Campus hiring still on the table

At the start of FY26, TCS had indicated it would maintain campus hiring at levels similar to the previous year, targeting around 42,000 freshers. Management has also said AI adoption could both create new roles and improve delivery efficiency, allowing the company to scale work without proportionate increases in headcount.

The latest numbers suggest that while restructuring has drawn public attention, the more decisive factor behind TCS’ workforce contraction has been restrained hiring amid an uneven demand environment.