How Emergency Fund, Insurance Coverage, and Robust Financial Plan Can Cushion the Blow of TCS Layoffs
The recent announcement of TCS laying off 12,000 employees due to strategic realignment and skill mismatch has created uncertainty for many, especially mid- and senior-level staffers. These layoffs, a part of TCS's journey to become a future-ready organisation amid rapid technology changes, underscore the importance of financial preparedness.
Why Building an Emergency Fund is Crucial
An emergency fund is a dedicated savings buffer designed to cover at least 6 to 12 months of essential living expenses. In the face of sudden job loss, like the TCS layoffs, this fund provides:
Immediate liquidity for daily expenses without incurring debt
Peace of mind to manage unforeseen financial shocks
Time to seek new job opportunities without financial desperation
By saving steadily, employees can create a cushion that prevents disruption to their lifestyle and financial goals during transition periods.
Leveraging Insurance Coverage
Insurance is a critical layer of financial security that complements an emergency fund:
Health insurance ensures medical costs don’t drain savings, especially important with possible stress-related health issues during layoffs
Income protection insurance or unemployment insurance (if available) can provide partial income replacement during job gaps
Extended insurance benefits are often offered as part of TCS's layoff packages, helping buffer costs temporarily
Maintaining adequate insurance coverage minimizes out-of-pocket expenses and protects long-term savings.
Crafting a Robust Financial Plan
A robust financial plan tailored for volatility includes:
Diversifying income streams and investments to reduce dependence on a single salary
Regularly updating skills to improve employability and reduce job risk, aligning with TCS’s realignment focus on “future-ready” skills
Setting clear spending priorities and reducing discretionary expenses during uncertain times
Planning for potential pay cuts and unexpected financial obligations, such as legal or advisory costs related to employment termination
Financial planning ensures long-term stability and quick recovery after workforce changes.
Support and Resources from TCS
TCS has stated it will offer:
Severance packages for affected employees
Extended insurance benefits
Outplacement and counselling support to ease transitions
Employees should actively engage with these support measures while leveraging personal financial tools to navigate this disruption.
Frequently Asked Questions (FAQ)
Q1: How much should I keep in my emergency fund during uncertain job conditions?
At least 6 to 12 months’ worth of essential expenses is advisable to cover rent, food, utilities, loan EMIs, and basic healthcare costs.
Q2: Does TCS provide any financial or insurance benefits during layoffs?
Yes, TCS provides severance pay, extended insurance benefits, and outplacement support to affected employees.
Q3: Should I rely solely on severance for financial stability post-layoff?
No. While severance helps, it’s important to have an emergency fund and insurance to manage the gap until you find new employment.
Q4: How can I improve job security after layoffs?
Upgrade skills relevant to emerging technologies such as AI, cloud computing, and data analytics, as TCS is focusing on these areas.
Q5: What financial steps should I take immediately after a layoff notice?
Review and reduce non-essential spending, assess insurance coverage, activate your emergency fund if needed, and start job searching while utilizing any company-offered support.
Published on: July 28, 2025
Published by: PAVAN
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