TCS Share Price Today: Tata Consultancy Stocks Dive After 12,000 Job Cut Announcement

The stock price of Tata Consultancy Services (TCS) fell by almost 2 percent, following the announcement of recent job cuts affecting 12,261 employees.

This reduction in workforce is part of the company's plan to decrease its employee count by 12,261 people in the current financial year 2026.

When a company announces job cuts, investors often become concerned about its future, which can lead them to sell shares and cause a price drop. These job cuts primarily impact middle and senior managers.

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The company intends to reduce staff mainly in roles such as middle and senior management. Junior or entry-level staff are not as significantly affected.

The Nifty IT Index, which tracks technology companies, also declined by over 1 percent.

Given TCS's significant market presence, its stock decline also led to a fall in the stocks of other companies, contributing to an overall drop of more than 1 percent for the IT sector.

TCS shares have been performing poorly, down 10 percent in one month and over 30 percent in one year. This indicates a consistent downward trend in its market value.

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The company states that the job cuts are being implemented to make the organization more "future-ready" and with a greater focus on AI.

TCS also clarified that the job cuts were due to a skills mismatch among employees, not because fewer people were needed overall. Despite facing criticism for this move, TCS still plans to hire and train only skilled individuals.

Before these job cuts, TCS introduced a new policy requiring employees to work at least 225 days a year on projects and limit their "on the bench time" (time without a proper project) to less than 35 days annually. This policy aims to ensure employees remain productive and consistently engaged in work.

More and more employees are leaving TCS, as the attrition rate has risen to 13.8 percent. A high attrition rate can be a concern for the company, as it leads to the loss of experienced talent.

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TCS reported a profit increase of 4.38 percent in the last quarter. Although their revenue decreased slightly, they managed to be more efficient with their money, leading to increased profitability despite earning a little less overall.

TCS also declared an interim dividend of Rs 11 per share for its shareholders, coinciding with its rising profits.