Tata Consultancy Services (TCS) reported a reduction of 11,151 employees in its workforce at the end of the third quarter of FY26, bringing the total headcount to 5,82,163.
The company’s net profit for the quarter fell by 13.92 percent year-on-year to Rs 10,657 crore, while revenue from operations increased to Rs 67,087 crore, marking a 4.87 percent rise compared to the same period last year.
The decline in net profit was attributed to restructuring expenses and a one-time impact from the implementation of new labour codes.
According to Financial Express, the reduction in headcount was part of an ongoing restructuring exercise, with TCS having previously announced plans to lay off around 12,000 employees earlier in 2025. Of the 19,755 staff reduction in the previous quarter, only 6,000 were reported as involuntary actions related to restructuring.
The company’s Chief HR Officer, Sudeep Kunnumal, stated that TCS has doubled its intake of fresh graduates with advanced skills, particularly in artificial intelligence, to expand its next-generation talent pool.
Analysis showed that the company faced a one-time statutory expense of Rs 2,128 crore due to the new labour codes, which included higher provisions for gratuity and long-term compensated absences. This statutory impact was a significant factor in the year-on-year decline in net profit, even as adjusted profit (excluding the one-time impact) grew by 8.5 percent to Rs 13,438 crore.
The company’s order book for the quarter stood at $9.3 billion, a decrease from $10 billion in the previous quarter. Coverage revealed that TCS announced a total dividend payout of Rs 57 per share for Q3 FY26, comprising an interim dividend of Rs 11 and a special dividend of Rs 46. The record date for the dividend is 17 January 2026, with payment scheduled for 3 February 2026.
“As of this quarter, there are over 217,000 associates with advanced AI skills. We doubled our intake of fresh graduates with higher order skills, rapidly expanding our next-generation talent pool,” said Sudeep Kunnumal, Chief HR Officer, TCS.
In the context of broader industry trends, reporting indicated that TCS’s annualised revenue from AI-led services reached $1.8 billion, reflecting a 17.3 percent quarter-on-quarter increase in constant currency terms. The company’s leadership reiterated its commitment to becoming a leading AI-driven technology services provider, with CEO K Krithivasan highlighting the continuation of growth momentum from the previous quarter.
Employee restructuring and attrition rates remain key factors to watch, as details emerged from the Q3 results. The company’s operational margin for the quarter was 25.2 percent, and cash flow from operations was 130.4 percent of net income. TCS’s share price closed at Rs 3,235.70 on the day of the results, reflecting a 0.86 percent increase, though the stock has declined 4.33 percent over the past six months.
“The growth momentum we witnessed in Q2FY26 continued in Q3FY26. We remain steadfast in our ambition to become the world’s largest AI-led technology services company, guided by a comprehensive five-pillar strategy,” said K Krithivasan, CEO and Managing Director, TCS.
Looking ahead, further updates indicate that TCS expects international revenue to improve in FY26, driven by AI-led projects and broad-based adoption across geographies. Margin levers are expected to remain intact, supported by operational efficiencies and ongoing workforce restructuring, though rising attrition could present headwinds.
Note: This article is produced using AI-assisted tools and is based on publicly available information. It has been reviewed by The Quint's editorial team before publishing.