TCS to Create 5,000 UK Jobs Even After Global Layoffs

Source Credit : Portfolio Prints

Introduction

Indian IT behemoth Tata Consultancy Services (TCS) has made headlines by announcing plans to create 5,000 new jobs in the United Kingdom over the next three years — a striking decision, given that the company is simultaneously undergoing large-scale workforce reductions globally. This dual strategy of expansion and contraction has significant implications for TCS's business model, its positioning in global markets, and broader trends in the tech industry.

Background: The Layoffs

• In its latest quarterly results (July–September 2025), TCS reported a substantial decline in headcount. Various reports suggest that the company’s workforce shrank by about 19,755 employees, dropping from ~613,069 to ~593,314.


• However, TCS’s Chief HR Officer, Sudeep Kunnumal, clarified that of those reductions, roughly 6,000 were formal layoffs (i.e. “released” staff at mid- and senior levels) with the rest being voluntary exits, attrition, or non-renewals.


• Earlier in mid-2025, TCS had already announced plans to cut about 12,000 roles, or ~2% of its workforce, citing shifting client demand, automation pressures, and the need for greater efficiency.


• The company also incurred restructuring costs amounting to ₹1,135 crore in this quarter due to severance packages and other associated expenses.

The scale of these cutbacks has prompted scrutiny from unions and labor groups. For instance, the Nascent Information Technology Employees Senate (NITES) alleged that TCS may be underreporting the true number of exits.

The UK Jobs Announcement: What’s Behind It?

The Plan

Despite the global retrenchment, TCS announced that it will roll out 5,000 new jobs in the UK over the next three years.

The hiring is tied to the launch of a London-based AI Experience Zone and Design Studio, intended as a hub for innovation, co-creation, and client engagement in advanced technologies.

The London facility is the second design hub for TCS globally, the first being in New York.

Strategic Rationales

• Focus on high-value markets & capabilities The UK is a mature market with demand for AI, analytics, and digital transformation services. By investing in the region, TCS is betting on growth in more specialized, premium service lines.


• Strengthening footprint in second-largest market The UK has long been important for TCS. The firm currently supports ~42,000 UK jobs (direct and indirect) across 19 sites. In FY2024, TCS’s contribution to the UK economy was ~£3.3 billion, while its tax contributions totaled ~£780 million.


• Signal of confidence & market signaling In a period when many tech firms are retrenching globally, TCS’s move signals resolve and ambition. It positions the company as forward-looking in the face of headwinds.


• Balancing risk across geographies With pressures and uncertainties in certain markets (especially the U.S.), diversifying growth into regions like the UK helps de-risk revenue concentration.

Challenges, Risks & Criticisms

• Moral and optics issue: Critics may argue that investing in overseas hiring while cutting jobs in home geographies (e.g., India) sends a mixed message about priorities and commitments.


• Talent availability & cost: The UK labor market is competitive. Recruiting and retaining skills in AI, data science, and design in London can be expensive and challenging.


• Execution risk: Creating 5,000 jobs isn’t just about headcount — it requires robust infrastructure, culture, continuous investment in training, and pipeline of client projects.


• Regulatory, immigration, and visa hurdles: Hiring in the UK may involve immigration and work permit challenges, which can slow down ramp-up.


• Economic conditions: The broader UK and European economic environment is uncertain. Demand for IT/digital services can fluctuate with macro pressures and public sector budget cuts.

Conclusion

TCS’s decision to create 5,000 UK jobs amid sweeping global layoffs is a study in contrasts. On one hand, it underscores the company’s ambition, its belief in AI-led growth, and its commitment to key global markets. On the other, it reveals the pressure points and trade-offs inherent in navigating a transforming tech landscape.

How well TCS can execute this plan, absorb the challenges, and manage internal tensions will determine whether this becomes a defining pivot—or a cautionary tale—in the shifting era of technology services.