India’s largest IT services firm Tata Consultancy Services (TCS) has delivered a major jolt to the job market by laying off around 12,260 employees—marking its second-largest layoff in history after 2012, when it had let go of 2,500 employees. The scale and timing of this move have triggered concerns across the IT and job ecosystem, with many asking if this is merely a company-specific decision or part of a larger global trend driven by automation, AI, and macroeconomic turbulence.
Joining the chorus of worry are experts who believe these layoffs may be symptomatic of deeper structural shifts impacting not just TCS but the entire IT industry. With global tech firms slashing workforces and Indian IT giants significantly slowing down their hiring, this development has set off alarm bells.
Hiring Freeze and Layoffs Across Major IT Firms
TCS is not the only one tightening its belt. The top five large-cap IT firms in India are showing signs of stress and caution in their hiring strategies:
Infosys: Last year during April–June, it reduced headcount by 1,900 employees. This year, its hiring in the same period was limited to just 210 people.
Wipro: A slight reduction of 114 people, but more importantly, there is a complete hiring freeze.
Tech Mahindra: Laid off 214 employees this quarter; no new hires were made.
HCL Technologies: While the numbers are down from last year’s 8,000 layoffs during Q1, it still cut 270 jobs this quarter.
The hiring slowdown and layoffs are not restricted to India. Global players have also shown significant headcount reductions:
Microsoft: Cut around 9,000 jobs in 2025 alone.
IBM: Let go of approximately 8,000 employees.
Intel: Reduced its workforce by nearly 22%.
Meta (Facebook): Trimmed 5% of its global employee base.
Is This a Result of Global Slowdown or AI-led Disruption?
Analysts and industry watchers are debating the root causes behind this unsettling trend. Some point to macroeconomic factors like geopolitical trade tensions—especially between the US and its key trading partners—alongside high inflation, and a looming economic slowdown. Others emphasize the role of AI-driven disruption, which is reshaping the operational needs of tech firms.
According to analysts, many companies have started pivoting towards AI-led projects, which demand fewer human resources but higher capital investment. AI tools are replacing repetitive human tasks, leading to workforce downsizing in non-AI domains. Companies like Mphasis and Mastek, which have over 50% of their order books driven by AI solutions, are being viewed as better positioned for this transition.
Broader Economic Impact: Beyond Just IT
The panic is not just about jobs in tech. Experts warn of a domino effect across sectors. A slowdown in IT services can negatively impact:
Real estate demand, especially in tech hubs like Bengaluru, Pune, and Hyderabad
Consumer sentiment, especially for white-collar spending
Hiring in adjacent industries like finance, marketing, and consulting that are dependent on IT
Market experts have also drawn parallels to past economic cycles, warning against overly optimistic market expectations. They suggest that over-expansion by companies during the bull run may now be facing a reality check.
A Time for Strategic Caution
While many believe that India’s long-term growth story remains intact, this phase requires caution. Industry insiders urge investors, job seekers, and policymakers to brace for volatility and prepare for a possibly prolonged adjustment phase.
This wave of layoffs and hiring stagnation could be an early red signal of a broader economic cooling. While there’s still hope that the phase may pass soon, the industry must not underestimate the depth and breadth of what lies ahead.
