The layoff of 12,000 employees — roughly 2 per cent of the company’s global workforce — has understandably sparked serious concerns about AI’s potential impact on India’s job market. Although CEO K Kirthivasan clarified that the job cuts were due to a “skill mismatch” rather than AI, this explanation is unlikely to ease the growing anxiety. The IT sector plays a major role in India’s economic landscape, employing over five million people in 2024, contributing about 7 per cent to the GDP, and making up half of the country’s services exports.
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TCS Layoffs Signal Deeper Concerns for India’s IT Job Market and Economic Future
It’s no surprise that India’s IT sector has long been the most accessible and reliable route to economic advancement for the country’s vast pool of engineering graduates. As a result, any decline in job opportunities within this industry could have far-reaching consequences for both the economy and the political landscape. When combined with bold statements from global companies like Meta and Salesforce about a shrinking demand for entry-level engineers, along with an uncertain business outlook for the Indian IT industry, a sense of deep unease is inevitable. Against this backdrop, the TCS layoffs highlight three important lessons worth considering.
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AI’s Growing Role Threatens Fresh Hiring and Bench Strength in Indian
Secondly, while AI may not be the immediate cause, it will greatly impact India’s IT sector. Traditionally driven by low-cost engineering talent, the industry has seen stagnant entry-level salaries for a decade. Now, with AI capable of handling most tasks assigned to freshers, mass hiring may decline, and companies are likely to reduce surplus workforce, or the “bench,” going forward.
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