Tata Consultancy Services (TCS), India’s largest IT services firm, has announced plans to trim its workforce by 2% during the 2026 financial year. The reduction, which will primarily affect mid- and senior-level roles, is expected to impact around 12,200 employees.

The company stated that the job cuts are part of a broader restructuring effort aimed at aligning its operations with emerging technologies and shifting market demands. As TCS expands into new domains and integrates more AI-driven solutions, it is also focusing on retraining and redeploying talent internally.

“This transition is being executed thoughtfully to ensure client services remain unaffected,” the company said in a statement on Sunday.

The Indian IT industry, valued at approximately $283 billion, has been facing headwinds due to reduced discretionary spending by global clients. Economic uncertainty, high inflation, and concerns surrounding US trade policies have led to slower decision-making and delayed project initiations.

Earlier this month, TCS CEO K Krithivasan acknowledged that client hesitation was leading to sluggishness in project launches and longer turnaround times in finalizing deals.

Despite these challenges, TCS emphasized that its strategic pivot is aimed at long-term sustainability, with a focus on adaptability and innovation.