New Delhi, Jul 28 (PTI) The IT Ministry is keeping a close watch on the developments after Tata Consultancy Services' (TCS) decision to lay off over 12,000 employees, according to sources.

Employment growth remains a key priority, with sharp focus on how initiatives like Employment Linked Incentive can help boost job creation, they asserted. At the same time, the emphasis is on skilling and reskilling, they added.

The IT Ministry is keeping a close watch on the entire situation, and is in touch with the tech company, sources said.

The ministry is concerned and will go into why it is happening to understand the underlying causes.

The stance assumes significance as India's largest IT services firm, TCS, is set to lay off 12,261 employees or two per cent of its global workforce this year. The bulk of the impact will be felt on middle and senior grades.

TCS's workforce stood at 6,13,069, as of June 30, 2025. It increased its workforce by 5,000 employees in the recently concluded April-June quarter.

The move is part of the company's broader strategy to become a "future-ready organisation", focusing on investments in technology, AI deployment, market expansion, and workforce realignment, TCS said in a statement on Sunday.

"TCS is on a journey to become a future-ready organisation. This includes strategic initiatives on multiple fronts, including investing in new-tech areas, entering new markets, deploying AI at scale for our clients and ourselves, deepening our partnerships, creating next-gen infrastructure, and realigning our workforce model.

"Towards this, a number of reskilling and redeployment initiatives have been underway. As part of this journey, we will also be releasing associates from the organisation whose deployment may not be feasible. This will impact about 2 per cent of our global workforce, primarily in the middle and the senior grades, over the course of the year," it said.

TCS will provide appropriate benefits, outplacement, counselling, and support to the impacted employees, the company added. PTI MBI HVA

Employment oversight by government intensifies as a major firm realigns workforce, with focus on incentives and reskilling support. The IT Ministry is actively monitoring a major IT services firm's workforce reductions, engaging with the company to examine underlying causes and emphasising employment growth through Employment Linked Incentive measures and skilling/reskilling. The firm describes the action as workforce realignment for technological investment and commits to reskilling, redeployment and providing benefits, outplacement and counselling to affected employees.