After a cautious close yesterday, Indian share markets opened flat today, influenced by global cues and the growing focus on the India–US trade deal. 

In the midst of this market sentiment, Tata Consultancy Services (TCS) made headlines with a major organisational update. 

TCS, India’s largest IT services provider, announced plans to reduce its global workforce by around 2%, affecting nearly 12,000 employees. 

How did this announcement impact the stock, and what could it mean for the company going forward? Let’s take a closer look.

The 2% Workforce Cut

As of June 2025, Tata Consultancy Services (TCS) had a global workforce of 613,069 employees. The company has announced a planned workforce reduction of approximately 2%, which translates to about 12,000 roles. 

The reduction primarily applies to employees at the mid and senior levels, typically those with 3 to 10 years of experience who have been on the bench, meaning they have not been assigned to billable projects, for extended periods ranging from 3 to 18 months.

(Source: Annual Report 2024-25)

Unlike earlier layoff patterns in the IT sector that often began with entry-level or support roles, this move is focused on experienced employees. 

Alongside the workforce changes, TCS has introduced a revised bench policy. Employees will now be expected to maintain at least 225 billable days per year, with the permissible non-project period limited to 35 days annually.

TCS has stated that the workforce reduction will be implemented in a phased manner throughout FY26 to avoid disruption to client operations. The company has also said that it will provide support to affected employees through notice period payouts, severance packages, extended insurance coverage, and access to professional counselling and outplacement assistance.

Reasons For The Layoff

1. Evolving Skill Requirements and Role Realignment

TCS has cited a mismatch between existing skills and deployment requirements as one of the key reasons for the workforce reduction. According to CEO K. Krithivasan, the roles affected are largely in the 3–10 years’ experience range and have been unbilled for extended periods. The company clarified that AI-led productivity gains are not the direct cause, but evolving business needs are reshaping role suitability and utilisation.

2. Internal Cost Optimisation Measures

The workforce reduction follows recent cost control initiatives. In April, TCS deferred wage hikes, and more recently, it revised its bench policy, capping non-billable days at 35 annually. These steps are aimed at increasing utilisation and aligning internal resource management with delivery needs. 

3. Delayed Lateral Hiring and Hiring Strategy Reassessment

TCS has also delayed the onboarding of nearly 600 experienced lateral hires. Some candidates who had resigned from previous jobs have reported uncertainty about their joining dates. These delays coincide with broader changes in the company’s workforce planning and cost structures.

4. Macroeconomic and Client-Side Spending Pressures

The decision comes amid a weak global spending environment and subdued discretionary IT budgets. Many client organisations are operating under cost pressures driven by inflation, high interest rates, and cautious investment behaviour. These conditions have impacted project pipelines and deal sizes across the sector.

5. Sector-Wide Shift in Delivery Models

Indian IT services firms, including TCS, are adjusting to changes in how technology services are delivered. The industry is gradually moving away from headcount-led growth and cost arbitrage toward models based on automation, digital delivery, and specialised skills. This change is influencing organisational structures and staffing patterns across the sector.

Financial Aspects of the Decision

The workforce reduction at TCS comes in the context of continued macroeconomic uncertainty, delayed ramp-ups in client projects, and a slowdown in discretionary IT spending. While the company remains profitable, it has cited a need to rebalance employee costs and align skill sets more closely with current business needs.

In recent months, TCS has implemented a series of internal measures to manage costs. These include a deferral of wage hikes announced in April 2025 and a revised bench policy that caps unbilled days at 35 per year. These steps, along with the layoffs, form part of a broader resource optimisation strategy.

TCS has indicated that the workforce changes are intended to support margin sustainability. The employee cost-to-revenue ratio stood at approximately 47.8% in FY25, a modest improvement from the previous year. This metric reflects the ongoing efforts to maintain operational efficiency through resource realignment.

Year End	Total Revenue	Employee Benefit Expenses	Employee Cost as % of Revenue
Mar 2023	225,458	145,788	64.70%
Mar 2024	240,893	140,131	58.20%
Mar 2025	255,324	107,300	42.00%

(Source: Annual Report 2024-25)

The decision to reduce headcount is not tied to any immediate financial distress, but rather is part of a longer-term framework aimed at adapting to changing market dynamics. Alongside technological investments and internal restructuring, the move is expected to support the company’s goal of maintaining financial stability in a constrained demand environment.

Implications Of The Restructuring:

1. Strategic Vision and Organisational Alignment

TCS has stated that the current workforce changes are part of a broader effort to evolve into a “future-ready organisation.” This includes initiatives such as investments in new technologies, market expansion, and internal restructuring. The company is also focusing on deploying AI in both client-facing and internal operations. The workforce reduction is positioned as a step towards aligning talent with evolving business needs and redeploying resources toward growth areas.

2. Operational Agility and Cost Management

The company has described the restructuring as part of efforts to enhance operational efficiency and streamline delivery models. The changes are also aimed at redirecting capital toward technology investments. This follows two earlier steps: the deferral of employee wage hikes in April 2025 and the implementation of revised bench policies in June. TCS is also managing its employee mix to maintain profitability in a period of delayed client project ramp-ups and constrained discretionary spending.

(Source: ET)

3. Response from Employee Unions

Several employee unions, including NITES, the Karnataka State IT/ITeS Employees Union, and FITE, have publicly opposed the layoffs. These groups have described the workforce changes as unjustified and urged affected employees not to resign under pressure. Formal requests have also been made to government authorities to review the termination process. The unions have advised employees to maintain written records and seek legal or administrative recourse if necessary.

(Source: ET)

4. Stock Market Reaction

Following the announcement of the workforce restructuring, TCS shares declined by up to 1.80%, touching ₹3,079.20 on the BSE. The stock closed at ₹3,081.20 on the BSE and ₹3,081.60 on the NSE, marking a fall of approximately 1.7% from the previous session on 28th July 2025.

(Source: Money Control)

Conclusion

TCS’s restructuring comes at a time when the Indian IT sector is witnessing a slowdown in net hiring and a shift toward automation-driven delivery models. In Q1 FY26, the top six IT firms added just 3,847 employees, a 72% decline from the previous quarter. Similar changes have also been seen globally at companies like Microsoft, Google, and Meta. 

As an investor or observer, you may consider tracking company updates, earnings reports, and broader industry developments to stay informed and evaluate any future decisions regarding the stock.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Electricity powers more than just homes and factories, it powers ambition. And India’s ambition is massive.

As the country industrializes, urbanizes, and electrifies everything from rural homes to mega data centres, the demand for power is surging like never before.

By 2047, India’s electricity requirement is expected to quadruple. Clean energy, especially solar and wind, is taking centre stage.

And to manage all this efficiently, we need a robust, transparent marketplace for power trading.

That’s where the Indian Energy Exchange (IEX) comes in — a silent but powerful force behind India’s electricity backbone.

Over the past decade, IEX built itself into a near-monopoly, facilitating over 90% of all short-term electricity trade in the country.

Think of it as the NSE or BSE… but for power.

With a tech-driven platform, predictable business model, and first-mover advantage, IEX was every investor’s darling — consistently profitable, high-margin, and riding India’s energy transition wave.

But then came a twist. And not just a minor one.

Today, a regulatory move sent shockwaves through Dalal Street.

The CERC approved market coupling norms, which have remained a key overhang for IEX in the past few months. 

The company’s stock price tanked up to 26% intraday, as investors feared the company’s monopoly could be in threat.

IEX Shares Crash

So, what exactly is market coupling? Why did the market react so sharply? And is this the start of a structural shift in the Indian power exchange landscape?

Let’s find out.

What is Market Coupling and How Does it Impact IEX?

The Central Regulatory Electricity Commission (CERC) has approved the implementation of power coupling. This means that instead of each power exchange (like IEX) setting prices separately, all exchanges will now have one common price for electricity in a given time slot.

In the first phase, starting January 2026, the Day-Ahead Market (DAM) will be coupled. Different power exchanges will take turns (round-robin) to manage this.

This is bad news for IEX, the largest exchange, because:

• It may lose its edge in price discovery.
• Trading volumes could shift to newer or smaller competitors.
• IEX currently controls 85% of the spot market. That dominance is now at risk.

Key Aspect	Details
What’s Changing	Market coupling approved for power trading
Starts From	January 2026 (Phase 1)
Impact on IEX	May lose pricing edge and market share
Current Share	IEX holds ~85% of spot market
Why It Matters	One common price across all power exchanges

About IEX

Indian Energy Exchange (IEX) is the first and largest energy exchange in India providing a nationwide, automated, electronic trading platform for trading electricity products and for physical delivery of electricity, renewable energy certificates and energy saving certificates.

Currently, IEX, Power Exchange of India (PXIL) and the recently licensed Hindustan Power Exchange (HPX) are the three nodal power exchanges in the country, with IEX accounting for 85% of the market share. So, it’s a virtual monopoly.

IEX FY25 Product Mix

Source: Investor Presentation

Outlook

India is currently seeing a structural growth story in the power sector, backed by rising demand and rising needs owing to infrastructure push. 

Rising Power Demand

Source: IEX Investor Presentation

But if India is to take giant strides to emerge as one of the strongest economies in the world, the power sector must play a critical role.

India is the third-largest producer and second-largest consumer of electricity worldwide. It goes without saying that in an increasingly digitised and automated world, power will remain a necessary and critical resource. 

For India to take its rightful place in the world economy, making its electricity market more competitive and efficient is of utmost importance.

And that’s what this market coupling move is aimed at. While market coupling will increase competition for IEX, it will also improve efficiency in India’s power market.

IEX may lose some market share in the short term, but the overall growth in power trading volumes could still benefit the company in the long run. Even if IEX’s market share drops, a bigger market can mean more business in absolute terms.

Nevertheless, a risk for IEX is that it operates in a highly regulated industry with the Central Electricity Regulatory Commission (CERC) exercising tight control. Business expansion is subject to regulatory approvals and demand is also uncertain with cycles seeing excess generation and poor electricity demand.

Now, investors are keenly awaiting IEX’s quarterly results, which will be released later today. The management’s comments on the recent coupling news should be key.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

Once known as a cash-first economy, India has undergone a dramatic shift in how it transacts.

From corporate giants to local tea stalls, everyone has a QR code now. And with just a few taps, payments happen instantly, cashlessly.

India’s digital payments story isn’t just growing, it’s exploding. In FY24 alone, we saw 159 billion digital transactions. And by FY29, that number is expected to triple.

What’s powering this boom?

– Affordable smartphones
– Seamless payment experiences
– Government-backed initiatives like UPI and the PLI scheme

And at the centre of it all is Paytm — a name that’s become synonymous with digital payments in India.

Scroll through any payment app, and chances are, you’ll see Paytm in the mix.

Today, Paytm share price was in focus after the fintech company posted its Q1 results.

Let’s take a detailed look to understand how the company performed and what lies ahead.

Paytm Reports Positive EBITDA for the First Time

Paytm’s parent company, One97 Communications, reported a positive EBITDA for the first time in Q1FY26. 

Reacting to this, the stock price surged over 2% today. In fact, the stock has surged over 20% in the past month, reflecting renewed investor confidence.

Paytm Share Price – 1 Month

Founded in 2010, Paytm is one of India’s leading digital payments and financial services companies.

What began as a simple mobile wallet has now evolved into a comprehensive fintech ecosystem.

• The company earns the majority of its revenue from payment services, including peer-to-peer and merchant QR payments, UPI transactions, and its signature soundbox devices.
  
• Its financial services distribution arm covers credit cards, insurance, loan distribution, wealth management, and brokerage.
  
• Under marketing services, Paytm helps merchants with advertising, deal promotions, ticket bookings, and gift vouchers.

Q1FY26 Performance Highlights

Payment services, the company’s core business, grew by 18% YoY.

Paytm’s Gross Merchandise Value (GMV) increased 27% YoY, reaching ₹5.4 lakh crore — largely driven by the addition of new devices.

The company’s revenue from financial distribution services doubled during the quarter.

While personal loans saw a slowdown and equity broking faced regulatory adjustments, leading to a dip in customers from 5.9 lakh to 5.6 lakh, revenue still grew. This growth was led by higher disbursement of non-default loss guarantee (non-DLG) loans to merchants, indicating better asset quality. Notably, 50% of loans went to repeat borrowers — a strong signal of trust and retention.

Marketing services revenue declined, attributed to a drop in monthly transacting users.

What Worked Behind the Numbers

Paytm’s operating costs were tightly managed. A reduced share of DLG loans helped cut costs significantly. As a result, contribution profit jumped 52%, with contribution margin improving to 60%.

The company also controlled employee costs, ESOP expenses, and marketing spends, which helped swing from EBITDA loss to profit.

This EBITDA turnaround, along with an income tax refund (reflected in other income), helped Paytm report a net profit of ₹123 crore for the quarter.

Paytm Outlook after Q1 Results

While the contribution margin stood at 60% in Q1, management has indicated it may soften to the mid-to-high 50s in the upcoming quarters.

ESOP cost was unusually low this quarter due to CEO Vijay Shekhar Sharma voluntarily surrendering his ESOPs. However, the company expects FY26 ESOP cost to be in the ₹250–275 crore range, significantly higher than the ₹30 crore in this quarter.

The rise in non-DLG loans within financial services is a positive trend.

In the merchant segment, Paytm continues to build a strong and sticky portfolio, benefiting from its ecosystem strength and early-mover advantage — both critical for long-term growth.

Based on the current momentum and operational discipline, Paytm appears well-positioned to maintain EBITDA profitability through FY26.

Long Term Growth Prospects

India’s journey towards a cashless economy is accelerating fast and the numbers speak for themselves.

At the centre of this transformation is UPI, which is projected to handle 91% of all retail digital payments by FY29. With its unmatched convenience and speed, UPI is clearly displacing traditional methods like debit cards.

This explosive growth creates a long runway for companies driving the UPI ecosystem — from fintech players to digital platforms and agile private banks.

Their ability to innovate, scale, and stay resilient amidst regulatory and competitive pressures will determine who leads India’s digital financial future.

Conclusion

While Paytm has posted its first-ever profit this quarter, its regulatory challenges are far from over.

The company has taken significant steps to align with compliance norms, but how effectively it executes these changes remains to be seen.

There’s no denying Paytm’s long-term potential — its brand, reach, and tech ecosystem are unmatched.

But that’s also the challenge: realising that potential depends on survival and execution in the short term.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.