Team Siliconindia

·  TCS lays off 12,000 employees amid AI-led restructuring and weakening global demand.

·  AI automation reshapes IT jobs, pushing firms to prioritize upskilling and creativity.

·  Geopolitical and US economic uncertainties dampen IT sector outlook through 2025.

The Indian information technology (IT) sector is facing increasing pressure, evidenced by recent massive job cuts and organizational overhauls in large companies. Tata Consultancy Services (TCS) recently declared job cuts of 2% of its worldwide employee base, which translates to about 12,000 staff, mostly at the mid and senior levels.

While TCS frames this action as a part of a larger strategy of developing a "future-ready workforce" via upskilling and redeployment, it also reflects a larger trend towards cost-cutting fueled by AI implementation, project slowdowns, and economic headwinds globally.

The increasing use of Artificial Intelligence is radically transforming the Indian IT employment market. Tasks that were previously done manually like coding, data analysis, and customer service are more and more being handled by AI tools. This has resulted in a dramatic reassessment of man power requirements, with routine jobs facing more threats. Businesses are encouraging workers to reskill, adopt innovative problem-solving, and shift to new-age technology jobs.

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Other large IT companies, such as HCL and Wipro, are also rewriting their workforce strategies. HCL is optimizing the deployment of talent in focused areas and Wipro is taking restructuring expenses, especially in Europe.

Compounding the difficulty are geopolitical and macroeconomic risks, particularly those related to the U.S. economy. Federal Reserve delays in cutting interest rates and still unfolding tariff issues are causing businesses to take a more conservative approach to hiring. Instead of growing headcounts, companies are concentrating on optimizing the potential within their current teams most especially in AI and digital technology.

Though India's IT sector is expected to have subdued earnings in the balance of 2025, industry watchers are optimistic about a slow recovery in 2026, subject to increased clarity regarding tariffs and possible U.S. monetary policy relaxation.