After Microsoft & Intel, TCS layoffs cost 12,000 jobs, spark industry concerns

Just a couple of days after Microsoft and Intel, Tata Consultancy Services (TCS), India’s largest IT services firm, will cut over 12,000 jobs. This amounts to about 2% of the workforce. 

TCS says this exercise is part of a 'strategic restructuring' and will cost jobs in middle and senior management roles. TCS, employing over 600,000 people, attributed the decision to the need for skill realignment in response to market shifts, including advancements in artificial intelligence (AI). CEO K Krithivasan emphasised that the layoffs were not solely AI-driven but part of a broader strategy to ensure long-term competitiveness. “We are taking proactive steps to build a future-ready workforce while maintaining client delivery excellence,” Krithivasan said in a statement. 

The announcement follows a period of weak financial performance, with TCS reporting a 3.1% drop in quarterly profit in July, citing cautious client spending and inflationary pressures.

Below, Bhupendra Chaubey dives into how the great Indian IT dream is cracking — and why this tech meltdown is now creating unbearable pressure on government jobs:

Indian IT under pressure

India's tech services sector is already under stress due to suppressed global demand and the advent of new technologies that are creating market disruptions. It also faces additional uncertainty due to potential US trade policy changes under a new administration. 

Industry analysts expressed concern about the layoffs’ ripple effects. “This signals a structural shift in IT services, where AI and automation are reshaping demand for traditional roles,” said Rishabh Gupta, an analyst at TechInsights India, told the media.

Employee unions and online forums criticised the layoffs, with some alleging forced resignations and stringent bench policies exacerbating worker stress. TCS denied claims of coercive practices, asserting that the restructuring was transparent and aimed at long-term sustainability. The layoffs underscore broader challenges for India’s IT giants, including Infosys and Wipro, which are also navigating AI integration and cost pressures. TCS said it would continue investing in reskilling programs and emerging technologies to prepare its workforce for future demands.