TCS offers severance pay of up to 2 yrs' salary amid workforce realignment

TCS is offering severance pay of up to two years' salary to long-serving staff whose skills no longer match company needs, as it realigns workforce

Indian IT services giant Tata Consultancy Services (TCS) is offering severance packages to long-serving employees whose skills no longer match the company’s evolving needs, Moneycontrol reported. The move comes as the firm reshapes its workforce in response to changing client demand and increasing automation.

 

Who is affected and what they receive

 

The restructuring mainly impacts employees whose skills have become less relevant or who have not upskilled to keep pace with client requirements. Affected staff are entitled to a notice period pay of three months, followed by a severance package ranging from six months to two years’ salary, depending on tenure, the news report said.

 

 

Employees who have been unallocated or “on the bench” for more than eight months without a suitable role are offered a simpler package, consisting of notice period pay equivalent to three months.   

 

Package details

 

•Tenure-based severance: Employees with 10-15 years of service may receive around 1.5 years of salary as severance. Those with more than 15 years of service are eligible for the highest payouts.

• Bench employees: Staff unallocated for over eight months receive only three months’ notice pay

• Early retirement: Employees approaching retirement are being offered early retirement options, which include full retirement benefits, insurance and an additional severance package ranging from six months to two years, depending on tenure, under the “TCS Cares” programme.

 

TCS layoffs 2025

 

In July this year, TCS announced plans to lay off around 2 per cent of its global workforce, affecting over 12,000 employees out of 613,069, as part of efforts to become a more agile organisation in the era of AI-led business transformation.

 

This marks the second significant layoff in the company’s history, the first being in 2012, when around 2,500 employees were let go due to underperformance.   

 

  “TCS is on a journey to become a future-ready organisation. This includes strategic initiatives on multiple fronts, including investing in new-tech areas, entering new markets, deploying AI at scale for our clients and ourselves, deepening our partnerships, creating next-gen infrastructure and realigning our workforce model,” the company had said in a statement.