Tata Consultancy Services’ (TCS) decision to cut over 12,000 jobs marks the beginning of a larger AI-driven transformation in India’s $283 billion IT sector, experts say. While TCS attributed the 2% workforce reduction to skill mismatches, analysts believe this signals a deeper shift that could lead to the loss of up to 500,000 jobs in the next 2–3 years. The layoffs, primarily affecting middle and senior management, are the largest ever by India’s top private employer.
AI is increasingly replacing roles in coding, manual testing, and customer support, impacting a sector that employs 5.67 million people and contributes over 7% to India’s GDP. It has traditionally absorbed a significant portion of the country’s engineering talent, but the growing demand for advanced skills is reshaping job dynamics.
Experts warn that professionals with outdated skills, especially in infrastructure management, basic testing, and non-technical managerial roles, are most at risk. Around 70% of job losses will likely hit those with 4–12 years of experience.
TCS said it is preparing for the future by investing in AI and realigning its workforce. However, employees are grappling with low morale, delayed onboarding, and stringent new bench policies.