Tata Consultancy Services is slashing 12,000 jobs in middle and senior management as AI shakes up India’s software giant.
The Mumbai-headquartered IT titan, India’s largest private employer with over 500,000 staff, is cutting 2% of its workforce. The move aims to make TCS “future ready” as it embraces AI and other tech shifts that disrupt its long-standing cost-driven delivery model.
TCS said it’s redeploying and reskilling employees, but will “release associates from the organisation whose deployment may not be feasible.” The focus is on keeping doers, while many people managers are getting the axe, says staffing CEO Neeti Sharma. 
“Across IT companies, people managers are being let go while the doers are being kept to rationalise the workforce and bring in efficiencies,” Neeti Sharma, CEO of staffing firm TeamLease Digital told the BBC.
Demand for AI, cloud, and data security skills is surging, but not enough to offset the wave of layoffs, experts say. India needs a million AI professionals by 2026, per Nasscom — but fewer than 20% of IT workers have AI skills.
“This technology shift is forcing businesses to reassess their workforce structure and analyse if resources should be redirected toward roles that complement AI capabilities,” economist Rishi Shah told the BBC.
Jeffries warns these cuts highlight broader growth woes in India’s IT sector. Since 2022, hiring has stalled amid US tariff uncertainties and shifting tech budgets. Indian hubs like Bengaluru and Hyderabad are seeing job losses — over 50,000 in 2023 alone.
“Aggregate net hiring at industry level has been weak since FY22 [financial year 2022], mainly due to the prolonged moderation in demand outlook,” Jeffries said.
TCS job cuts feed fears for India’s middle class and economic growth. Once a top absorber of fresh grads (600,000 yearly), Indian IT now takes only about 150,000. Fintech and multinational offshoots fill some gaps, but 20-25% of new grads may face unemployment.
“GCCs will never match the volume of hiring that the IT companies did,” said Sharma.
Business leaders warn this could hit real estate, consumption, and allied industries hard.
D Muthukrishnan, South India mutual-fund distributor, wrote on X:
“India’s trimmed down IT sector could ‘negatively impact many allied services and industries, crash real estate and give a big blow to premium consumption.'”
Entrepreneur Arindam Paul called the AI-related job threat existential for India’s middle class.
“Almost 40-50% white collar jobs that exist today might cease to exist,” Paul wrote. “And that would mean the end of the middle class and the consumption story.”
How fast Indian tech giants adapt to AI disruption will shape the future of the country’s tech dominance and economic growth.
