A Reddit post alleging that Tata Consultancy Services (TCS) forced a veteran employee into early retirement without severance has drawn attention to the company’s ongoing restructuring.
This claim comes as TCS prepares to lay off around 12,000 employees globally, roughly 2% of its workforce, in one of the company’s biggest-ever job cuts.
TCS CEO K Krithivasan told Moneycontrol that the decision is linked to skill mismatch and the company’s evolving business needs rather than AI-led productivity gains.
He also pointed out that in some cases they have not been able to deploy individuals to required roles.“Some people, especially at senior levels, find it difficult to transition to tech-heavy roles,” he said, adding that the company is moving from its legacy “waterfall” delivery model to a more agile, product-centric approach. This transition has reduced the need for conventional project and program managers.
The layoffs, to be implemented gradually through FY26, will mostly impact mid-to-senior level professionals.
Krithivasan said that the waterfall models had multiple leadership layers, which is changing, while describing the decision as “difficult but necessary.” He said that affected employees would be provided severance packages, extended insurance, mental health support and outplacement services.
Sunil Padmanabh, AI & digital strategy leader, called such positions “misfits,” concentrated in coordination and approval layers. Reflecting on the trend, he told AIM that Wipro has eliminated hundreds of mid-level roles to boost margins and agility, while TCS layoffs are partly linked to AI-driven role realignment.
According to NASSCOM–EY’s AI Adoption Index 2.0, 87% of Indian enterprises are mid-stage in AI adoption, with “expert” adoption almost doubling since 2022.
“The pattern is clear: Indian IT firms are flattening guardrail roles and reallocating talent toward AI-driven builder functions,” Padmanabh said.
Mid-senior level Under Threat
The industry’s historic tilt toward people-management has created a supply–demand imbalance. Murali Santhanam, CHRO, Ascent HR Technologies, said that the industry has an excess of coordinators, but a shortage of strong contributors in areas like architecture, data, product, SRE, and platform engineering.
Traditionally, Indian IT services companies built pyramid structures around managing people. “Strong technical professionals were often pushed into manager roles instead of being nurtured as technical experts. This model once made sense, as huge batches of freshers needed multiple layers of supervision,” Neeti Sharma, CEO, TeamLease Digital said.
The traditional services pyramid pushed engineers into supervisory tracks—TL, AM, PM—far too early, even when delivery called for technical depth. As the pyramid shifts into a diamond with fewer freshers and more mid-senior professionals, the management-heavy middle layer is increasingly visible.
Santhanam said that many coordination-heavy tasks like status tracking, reporting, ticket allocation, escalation – once central to mid roles – are now automated or absorbed into AI-enabled workflows.
What remains is higher-value work in product, data, and platform engineering – roles that require deep technical expertise. Redeployment is tough because many mid-level managers drifted away from these skills early in their careers. The result is AI has thinned out the managerial middle, while demand rises for strong individual contributors and technical leaders.
GCCs exposing gaps
GCC growth is exposing gaps in traditional mid-level IT roles. As global capability centres (GCCs) in India expand rapidly, they are moving beyond cost-arbitrage and delivery support into mandates around “product development, innovation, and domain-led solutions,” Santhanam said.
This evolution demands product-thinking, architectural depth, and business context, capabilities many mid-level managers in traditional IT services lack, having advanced through delivery-heavy and coordination-focused tracks.
Unlike IT services, GCCs emphasise “product innovation, ownership, and advanced technology,” hiring aggressively for roles in product management, cloud architecture and R&D, said Sharma.
These roles are outside the comfort zone of many mid-level IT managers accustomed to team supervision and project oversight. The result is a sharp contrast: GCCs offer better pay and faster growth for professionals with strong technical and innovation skills, while traditional IT firms struggle to redeploy managers into hands-on roles.
Recent layoffs have disproportionately impacted this mid-level cohort. To remain relevant, professionals must shift their mindset, invest in technical expertise, stay adaptable, and cultivate emotional intelligence as the industry pivots from manpower-driven delivery to value-driven outcomes in an AI-first world.
“AI fluency is critical, as managers must understand how automation reshapes workflows and where human judgment adds value. KPIs should shift from effort and coordination to business outcomes and innovation impact,” said Santhanam.
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