Tata Consultancy Services’ (TCS) decision to lay off nearly 12,000 employees—about 2% of its global workforce of over 6,00,000—indicates a seismic shift in the Indian information technology (IT) industry.
The move from the Tata Group firm has opened Pandora’s box, sparking fears of redundancies in a sector that has been one of the top job generators in the country. Job losses in India’s flagship software services firm has dented confidence across the sector amid an ongoing shift towards automation, skill gaps and the onset of artificial intelligence (AI).
TCS has clarified that the layoffs are not driven solely by automation but stem from “limited deployment opportunities and skill mismatches.”
CEO K Krithivasan told Moneycontrol that the move is part of a realignment strategy rather than an AI-led productivity exercise.
Despite these assurances, anxiety remains high among tech professionals, many of whom view the layoffs as a sign of broader, more disruptive changes underway in the IT sector, especially with the growing influence of AI.
On X, formerly Twitter, one user expressed the growing unease: “TCS is laying off 12,000 employees over the course of the year. If TCS is laying off, then what will be the situation in other IT firms? Looks horrible.”
Another post highlighted the stark pay disparity within the company:
“TCS CEO pay: ₹35cr
Top 5 leadership: ₹40cr
Avg employee: ₹15 lakhs
If top 100 took small pay cuts, it can save 12,000 jobs.
Their lives won’t be terrible at ₹2.5cr pay vs ₹3cr.
For 12,000 families, lives will be miserable at 0 pay vs ₹15 lakhs.
AI is real; mass layoffs need not be.”
On Reddit, users have reacted with a mix of sarcasm and concern. “Saans leta hoon toh ek company hazaaron ko lay off kar deti hai (I barely take a breath, and a company lays off thousands),” one user quipped. Another post read: “TCS was the last line of defence. It’s going to open a big floodgate.”
From a start-up perspective, a user noted how AI is reshaping business models: “2% is surprisingly low. I expect at least 20–30% over the coming years. I work in a start-up that aggressively uses AI and we are very highly productive now. More than we ever were despite cutting down 60% employee count. We went from loss making to fairly profitable very quickly.”
Others pointed to skill gaps within the traditional IT services ecosystem. One user commented, “Half of the service-based companies’ employees are not even fit for technical work,” citing colleagues unfamiliar with essential tools like Linux, GitHub, and cloud services.
In an interview with CNBC-TV18, former Tech Mahindra CEO CP Gurnani reflected on the industry’s shift, advocating a move toward outcome-based models.
Quoting the famous line from Sholay, he said, “Kitney aadmi the? Thank God that period will be over.” He added, “We all need to rewire ourselves toward output- and outcome-based models.”
For many, the TCS layoffs are a stark warning for the entire IT industry. One user on X wrote, “TCS is like the govt job in IT field. If TCS also starts to lay off then you know there is no place to hide in industry. Things are getting scary.”