New Delhi, July 30 -- Tata Consultancy Services' (TCS) plan to lay off nearly 2 percent of its workforce is raising concerns across the IT sector, with Jefferies warning that the move may signal deeper troubles. The brokerage said the layoffs could lead to near-term execution slippages and long-term attrition risks, reflecting weak underlying demand conditions. Jefferies believes the cost-cutting trend, coupled with AI-driven productivity demands, may push other IT firms to take similar measures, especially if they fail to win market share.

According to Jefferies, TCS' decision to let go of around 12,000 employees in FY26 is part of a broader restructuring initiative aimed at making the company "future-ready." The move is expected to aff...