New Delhi, Jul 28 (PTI) The IT Ministry is keeping a close watch on situation arising out of Tata Consultancy Services' (TCS) decision to lay off over 12,000 employees, and is in touch with the Tata Group company, sources said on Monday.

The move comes as India's largest IT services company is preparing to lay off two per cent of its global workforce this year, in what it describes as a broader strategy to become a "future-ready organisation", with focus on investments in technology, AI deployment, market expansion, and workforce realignment.

The bulk of the impact will be felt on middle and senior grades at TCS.

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 the underlying causes that has prompted the move.

The blue-chip stock dipped 1.76 per cent closing at Rs 3,079.05 apiece on the Bombay Stock Exchange (BSE) on Monday, as news of layoffs sent fresh tremors in the tech circles.

Meanwhile, the Nascent Information Technology Employees Senate (NITES) has approached Union Minister for Labour and Employment Mansukh Mandaviya, and urged that the government issue a notice to TCS seeking an explanation.

The IT employees' union has termed TCS' latest move as unethical, inhumane, outright illegal.

"The law clearly states that no employee who has served for over a year can be retrenched unless the company provides one month's notice or wages in lieu, pays statutory retrenchment compensation, and notifies the government. TCS has not complied with any of these legal requirements," NITES alleged, terming the move a blatant and wilful violation of the law.

The impact of such action is devastating, NITES said in its letter, adding that thousands of working professionals with families, EMIs, and financial commitments would suddenly lose their livelihood.

The psychological, emotional, and financial trauma of this move is unimaginable, Harpreet Singh Saluja, President of NITES, wrote in the letter.

NITES alleged that TCS' move, in no way, can be called restructuring.

"This is a mass sacking dressed in corporate jargon...If a company of TCS's scale is allowed to carry out mass layoffs without following due process and without consequences, it will set a dangerous precedent for other companies," Saluja wrote in the letter to the labour minister.

TCS's proposed move "will normalise job insecurity, erode employee rights, and severely damage trust in India's employment ecosystem," NITES emphasised.

It has appealed to the government to take immediate cognizance of this development and issue a notice to TCS seeking an explanation.

NITES has urged the government to direct the company to immediately halt all terminations and reinstate affected employees, and initiate an inquiry into the systemic pattern of forced exits, delayed onboarding, and unlawful retrenchments by TCS.

It has also batted for framing of stricter safeguards for the IT sector, arguing that the industry currently suffers from lack of enforceable employment protections.

"If this injustice is not addressed immediately, NITES, along with allied IT employee unions across India, will be forced to organise nationwide protests, legal campaigns, and public demonstrations to ensure that the voices of thousands of affected employees are heard," NITES said.

Market watchers believe that TCS' decision to slash 12,000 jobs this year is bound to send fresh tremors in the tech industry, that has been battling global macroeconomic woes and geopolitical uncertainty.

India's top IT services companies have delivered single-digit revenue growth in Q1FY26, capping off a somewhat-sobering June quarter as macroeconomic instability and geopolitical tensions have weighed on global tech demand and delayed client decision-making.

For TCS, the revenue rose 1.3 per cent year-on-year to Rs 63,437 crore, net profit improved 5.9 per cent to Rs 12,760 crore in Q1FY26.

TCS MD and Chief Executive K Krithivasan recently said the company is experiencing a "demand contraction" due to the continued uncertainties on the macroeconomic and geopolitical fronts, and added that he does not see a double-digit revenue growth in FY26.

Krithivasan had explained the delays in decision-making experienced in the preceding quarter have "intensified" now, and hoped for the discretionary spends - a prime mover of revenue growths for IT companies - would return once the uncertainties ebb.

According to Layoffs.fyi - a platform that tracks global tech industry layoffs - over 80,000 tech workers have been laid off across 169 tech companies in 2025 alone.

In 2024, that number stood at a staggering 1.5 lakh across 551 tech companies - the stark numbers coinciding as much with global macroeconomic woes as with deep debate in tech circles about the impact of AI on job roles, workforce, and employability.

In fact, Microsoft, the second most valuable publicly listed company after Nvidia globally, has so far laid off over 15,000 employees in 2025, that is 7 per cent of the company's global workforce.

In a memo to over 200,000 employees last week, Microsoft CEO Satya Nadella said the layoffs this year have been "weighing heavily" on him.

"This is the enigma of success in an industry that has no franchise value," Nadella had said in the memo to staff.

He further said: "Progress isn't linear. It's dynamic, sometimes dissonant, and always demanding. But it's also a new opportunity for us to shape, lead through, and have greater impact than ever before." PTI MBI HVA