After Tata Consultancy Services (TCS) announced plans to cut its global workforce by 2%, impacting around 12,000 employees, IT stocks came under pressure on the stock exchanges. The move triggered a selloff in large-cap IT names, with shares of Infosys Ltd and Wipro Ltd falling as much as 3% in Monday’s trade.

At the time of writing, the Nifty IT index is trading at 35,450.00, marking a decline of 173.75 points or 0.49% from the previous close of 35,623.75. The index opened at 35,521.70. Among the constituents, 4 stocks advanced while 6 declined. The index's price-to-earnings (P/E) ratio is 25.84, and the price-to-book (P/B) ratio is 6.90. As of 12:29 PM on July 28, the BSE Information Technology index was trading at 34,948.98, down 151.92 points or 0.43% from its previous close of 35,100.90. The index opened and hit an intraday low of 34,584.10.

TCS said that the move is part of the company’s larger reskilling and redeployment initiatives.

“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 organization whose deployment may not be feasible. This will impact about 2% of our global workforce, primarily in the middle and the senior grades, over the course of the year. This transition is being planned with due care to ensure there is no impact on service delivery to our clients,” the company said in a statement.

In Q1FY26, Tata Consultancy Services (TCS) reported a 6% year-on-year rise in consolidated net profit, reaching ₹12,760 crore, compared to ₹12,040 crore in the same quarter last year. The growth was supported by improved operational efficiency, robust deal wins, and a strategic pivot toward AI-driven solutions, despite continued global macroeconomic and geopolitical headwinds.

Revenue for the quarter stood at ₹63,437 crore, reflecting a modest 1.3% year-on-year increase, though it declined 3.1% in constant currency (CC) terms. Sequentially, revenue dipped 3.3% in CC terms. International business was flat, declining 0.5% in CC terms despite already subdued performance through FY24 and FY25. Notably, equipment and software costs dropped sharply to 1.14% of sales from 4.26% in the previous quarter, indicating that services and other business lines grew just 0.1% sequentially in CC terms.

TCS’s operating margin improved by 30 basis points quarter-on-quarter to 24.5%. Net cash generated from operations came in at ₹12,804 crore—equivalent to 100.3% of its net profit.