TCS' decision to lay off nearly 12,000 employees may lift margins

Firm's operating margin has remained below target for five consecutive quarters

Tata Consultancy Services’ (TCS’) decision to lay off roughly 12,000 employees, primarily mid- to senior-level managers, is being viewed by analysts as a move to shore up profitability rather than a shift towards an AI-driven future. 

While the company cited evolving business needs and future readiness as reasons, industry experts say the action is a cost-cutting measure aimed at improving operating margins that have remained below the firm’s aspirational range despite multiple efforts. 

The announcement on Sunday came as a surprise to many in the Indian information and technology (IT) sector, where involuntary layoffs have typically been handled quietly. Indian