As many as 500-600 employees have been impacted by the layoffs in sales and other related functions, two people familiar with the matter said.
The layoffs are across locations, they said, adding that the severance package being offered to the employees impacted by the decision is one month's salary for every year of service.
An e-mail sent to Tata Teleservices did not elicit a response.
Sources in the company said that these are challenging times for the telecom industry.
"What most of the operators including Tata Telservices are doing is workforce rationalisation, to stay competitive in line with the needs of the market," they added.
The lay-offs comes at a time when the telecom industry has been witnessing an intense tariff war triggered by the entry of Reliance Jio, whose disruptive positioning in the market has left most of the telcos bleeding.
The telecom operators are facing tremendous pressure on revenue and profitability even as the industry's debt has soared to nearly Rs 4.6 lakh crore.
Tata Teleservices spearheads Tata Group's presence in the Indian telecom market. The company, along with the listed arm Tata Teleservices (Maharashtra) Ltd has presence in 19 telecom circles in the the country.
It offers integrated telecom solutions to its customers across wireline and wireless networks on platforms like GSM, CDMA and 3G.
According to the data of Telecom Regulatory Authority of India (Trai), Tata's mobile subscriber base stood at 51.2 million as on February 28, 2017. The company has nearly 4.4 per cent market share in the country's total mobile subscriber base of more than 1.16 billion.