.png){kind=logo}
The Indian IT sector is going through a storm. Recent layoffs at Tata Consultancy Services (TCS), the largest IT company in India, made executives across the industry uneasy with talk of these being only the first in line. Many fear that additional layoffs will happen at other major IT firms.
TCS had just laid off over 12,000 employees. Performance issues and project delays were cited as key reasons for this TCS layoff. However, industry experts say that a bigger issue is at play: with the slowdown in the global economy, automation, and a reduction in client spending, the entire IT sector is feeling pressure.
Over the past year, many projects in the US and Europe have been scaled back. These two regions are crucial markets for Indian IT firms. When businesses in these areas reduce their budgets, Indian IT companies are adversely affected. Currently, clients are being cautious and seeking better results at lower costs.
"Global uncertainty is forcing clients to delay or cancel projects," said a senior IT analyst. "This reduces the need for large teams. Companies are trying to do more with less."
Another significant factor is automation. From this perspective, computer-based tools such as AI and machine learning replace jobs that were once performed manually by humans. The fiercest blows are felt at the mid-level and entry-level jobs. Data entry, testing, and backend support are being increasingly automated.
TCS is not alone in reducing its workforce. Infosys, WIPRO, and Tech Mahindra, among others, have all slowed hiring. Some are strictly reviewing their employees' worth. Industry sources indicate that layoffs are already occurring in smaller batches across multiple firms.
The pandemic triggered an exceptional growth phase for IT hiring, with a massive demand for remote work and digital projects. The phenomenal growth phase is gone. Companies hired heavily during 2021 and 2022 and are now struggling to manage the inflated payrolls.
"There was over-hiring during the pandemic. The demand has now dropped, but the workforce size didn't adjust quickly," says an HR consultant. "Layoffs are a way to fix that."
The fresh graduates feel all the heat. Many wait to be onboarded after being offered jobs last year. Some have even had their offers postponed or withdrawn, and company training programs have also been downsized.
Also Read: TCS to Cut 12,000 Jobs in Workforce Reshuffle: What This Means for Indian IT Sector?
Once seen as the most stable player in India’s IT sector, the latest TCS layoff of over 12,000 employees marks a huge turning point in the industry. While answering why TCS is laying off employees in 2025, CEO K. Krithivasan stated that the company focuses on aligning talent with business priorities and boosting productivity.
The TCS layoff, however, may indicate a broader trend; global buyers are cutting back on tech budgets, and automation is now replacing many traditional jobs.
Experts suggest the slowdown may continue for several more quarters. Cost pressures, post-pandemic overhiring, and shifting client requirements are influencing companies' workforce strategies. TCS's step signifies a trend for all IT companies.
To maintain professional relevance, continuous reskilling is essential. Jobs in AI, cloud computing, cybersecurity, and data analytics provide greater job security. The Indian IT sector is undergoing a transformation, and in this newly competitive environment, only the strongest will survive.
