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TCS Records ₹1,135 Crore Restructuring Cost in Q2 FY26
India's largest IT services provider, Tata Consultancy Services (TCS), has recorded a one-time restructuring cost of ₹1,135 crore in the September quarter (Q2 FY26), which represents the financial consequence of its ongoing organisational realignment and workforce optimisation initiative.
Cost of this restructuring
As per the October 9 filing of the company, the restructuring cost, which was counted as an exceptional item, dragged TCS's consolidated net profit to ₹12,075 crore in the quarter. This was marginally lower than analyst estimates. A CNBC-TV18 survey had estimated the company's profit at ₹12,528.3 crore and revenue at ₹65,114 crore.
TCS's revenue was at ₹65,799 crore, an increase of 3.7% sequentially and 0.8% in constant currency conditions. The figures were viewed as modest, considering the prevailing macroeconomic uncertainty and prudent enterprise expenditure across worldwide markets.
Headcount Now
The restructuring expense follows two months since CEO K Krithivasan informed news outlets that TCS would cut around 2% of its employees, close to 12,000 workers, over the fiscal year.
He says this is part of a phased restructuring to rationalize operations and realign mid- and senior-level positions to boost efficiency.
But the restructuring has apparently caused anxiety in the organisation. Staff unions and internal circles have claimed that the true number of departures could be much greater than reported, saying that numerous employees are being "asked to leave voluntarily" in order to maintain official layoff figures low.
Union Reaction
Over recent months, unions such as the All India IT & ITeS Employees’ Union (AIITEU), Forum for IT Employees (FITE), and Union of IT & ITES Employees (UNITE) have organised protests and social media campaigns against what they describe as “forced resignations” and “coerced exits.”
Sources close to the company dismissed these allegations, terming them “incorrect and misleading.”
A TCS spokesperson reiterated that the restructuring impact remains limited to 2% of the workforce, as earlier communicated.
Since this is a developing story, TCS continues this restructuring activity, making it one of the most significant workforce realignments in years. This also highlights the plight of the industry as a whole and the evolving demands of clients.