TCS stock price faces potential 16% crash, breaking 16-year trend.

TCS stock slipped 1.7% to ₹3,082 on Monday, after the company announced it would lay off 12,260 employees, or 2% of its global workforce. The move highlights challenges faced by the tech sector due to a sluggish global economy, geopolitical tensions, and tariff concerns. TCS reported a 6% YoY decline in Q1 revenue, with similar declines seen by other tech giants like Microsoft, IBM, Intel, and Meta. The stock may crash another 16% as it approaches a 16-year trend.

New Delhi, July 2, 2025 - Tata Consultancy Services (TCS) shares slipped 1.7% to ₹3,082 on Monday following the company's announcement of a 2% workforce reduction, impacting 12,260 employees. The move underscores the challenges faced by the tech sector due to a sluggish global economy, geopolitical tensions, and tariff concerns [1].

TCS reported a 6% year-over-year (YoY) decline in Q1 revenue, mirroring similar declines seen by other tech giants such as Microsoft, IBM, Intel, and Meta. The stock may face further pressure, potentially falling another 16% as it approaches a 16-year trend.

The job cuts, primarily targeting middle and senior managers, highlight the company's efforts to address skill mismatches and optimize its workforce. TCS CEO K Krithivasan stated that the layoffs are not driven by productivity gains from AI but rather by the need to realign the workforce with current demands [2].

Brokerages have expressed mixed sentiments. Jefferies noted that the workforce reduction might lead to near-term execution slippages and higher long-term attrition. Meanwhile, Citi Research maintained its 'sell' call, citing sluggish earnings and cash flow trends [1].

TCS has assured its clients that the layoffs will be implemented cautiously to avoid service disruptions. The company will provide notice period pay, severance packages, extended insurance benefits, and outplacement opportunities to the impacted employees. The layoffs will be concluded over the next three quarters of FY26 [1].

References:
[1] https://www.moneycontrol.com/news/business/markets/tcs-job-cuts-worry-brokerages-as-execution-attrition-concerns-emerge-citi-maintains-sell-13335029.html
[2] https://www.cryptopolitan.com/indias-largest-tech-firm-to-cut-workforce/