TCS Reports Sharp Headcount Drop of Nearly 20,000 in Q2 FY26 Amid Restructuring Drive

Homegrown IT major Tata Consultancy Services (TCS) has come under scrutiny after its latest financial disclosure revealed a sharper-than-expected fall in headcount during the September quarter (Q2 FY26).

According to the company’s filings, TCS closed the quarter with 593,314 employees, down from 613,069 in Q1 FY26 — a net reduction of 19,755 employees in just three months. The decline marks one of the steepest quarterly drops in the IT major’s history.

This figure, however, contradicts the company’s earlier communication. In July, CEO K. Kirthivasan had announced a 2% workforce rationalisation plan, affecting around 12,000 employees globally as part of a restructuring exercise.

While TCS’s attrition rate eased slightly from 13.8% in Q1 to 13.3% in Q2, the sharp fall in total headcount suggests that most exits were management-driven rather than voluntary.

Despite the headcount reduction, TCS posted robust financial results for Q2 FY26. The company reported revenue of Rs 65,799 crore, up 3.7% year-on-year, driven by strong growth in its cloud, digital, and enterprise solutions segments. Net profit rose 8.4% YoY to ₹12,904 crore, reflecting healthy operational efficiency and stable margins.

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The company’s operating margin remained resilient at around 25%, supported by cost optimisation measures and improved project delivery efficiencies.

Geographically, TCS continued to see strong traction in North America and Europe, which together contributed the bulk of its revenue growth. The banking, financial services, and insurance (BFSI) segment remained the largest vertical, while demand for IT consulting and business transformation services continued to accelerate.

Industry analysts reckon that the contrasting trend of robust financial performance and significant headcount reduction underscores TCS’s ongoing restructuring drive, aimed at aligning skills with market demand and emerging technology requirements, even as it navigates workforce optimization challenges.