NEW DELHI: Shares of major IT companies dropped sharply on Monday after Tata Consultancy Services (TCS) announced plans to reduce its global workforce by 2 percent, cutting around 12,000 jobs.The move was driven by weak discretionary spending and economic concerns, which rattled the market. The cuts also pulled the Nifty IT index 1.6 percent lower, according to ET.TCS shares slipped 1.7 percent to Rs 3,081.60 following the announcement. The company said the job cuts were not linked to AI-driven efficiencies, but part of a structural shift in its business.“The deployment of some associates may no longer be feasible under current market conditions,” TCS said.Furthermore, the company added that it could no longer reassign employees whose skills did not match changing client demands.Other IT stocks also took a hit. Wipro fell the most, losing 3.5 per cent to close at Rs 250.05, followed by Infosys, which declined 2.2 per cent to Rs 1,482.50. HCL Technologies ended the day down 1.1 percent, while Tech Mahindra slipped nearly 1 per cent.The Nifty IT index is currently trading 24 per cent below its recent high of 46,088.90 with sustained pressure on the sector.“The sharp cut in the IT index has been dragging the market down, and there is no respite in this in view of the 2% cut in its global workforce announced by TCS. However, midcap IT names hold promise in view of their strong growth prospects,” said Dr VK Vijayakumar, chief investment Strategist at Geojit Investments.A report by ET revealed that the top six IT firms hired just 3,847 people in the April to June quarter, a 72 per cent drop from 13,935 in the previous quarter.

TCS says layoffs, transition being handled with care

TCS employed 613,069 people globally as of June 2025. The company said the layoffs would mainly impact employees in middle and senior roles.The company assured that the transition was being handled carefully to maintain client services and that those affected would receive full notice-period compensation, severance packages, insurance extensions, outplacement help, counselling, and transition support.The layoffs come amid growing debate over TCS’s newly updated “bench policy.”The policy has also drawn legal complaints. Under the revised policy, unassigned employees have just 35 days to find a project before facing performance actions, and must clock at least 225 billable days annually.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)