India's Layoff Wave: What's Fueling Job Cuts Despite Growth? TCS laid off over 12,000 employees, while Infosys has drastically slowed down fresher onboarding and Wipro is also trimming roles in a targeted manner
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Some time ago, the global tech industry was experiencing widespread layoffs across tech giants like Microsoft, IBM, Google, and Amazon. Now, the wave appears to have shifted towards India.
In Q1 FY26 (April–June 2025), Tata Consultancy Services (TCS) posted a 1.3 per cent rise in revenue to INR 63,437 crore, with net profit up by 5.9 per cent. Infosys reported a 7.5 per cent revenue increase to INR 42,279 crore, while HCLTech outperformed peers with an 8.1 per cent rise.
Despite reporting positive revenue growth, several Indian IT and non-IT firms are undergoing significant workforce reductions. TCS announced a workforce reduction of about 2 per cent, translating to over 12,000 jobs. While Infosys drastically slowed down fresher onboarding. Wipro is also trimming roles in a targeted manner. Meanwhile, Bhavish Aggarwal's AI startup Krutrim laid off over 100 employees.
If not financial distress, then what?
The big question remains, if companies are not in financial distress, what's driving this layoff surge? Neeti Sharma, CEO of TeamLease Digital, explains, "Global economic headwinds such as the slowdown, inflation, and high interest rates are key factors contributing to muted growth. Additionally, the rise of AI, particularly Agentic AI is changing the way companies operate, replacing routine and repetitive roles with AI agents."
She adds, "This shift is compelling organisations to re-evaluate their structures, distinguishing between roles that will persist and those likely to become redundant. A widening skills mismatch has exacerbated the issue, with many employees lacking the capabilities needed for today's evolving roles. Sector-specific challenges, such as funding constraints in startups and shifting consumer behaviour in retail and manufacturing, have also played a role."
According to Nasscom's recent report, 'Workforce Realignment and Industry Transformation', the industry is at an "inflection point" and anticipates some degree of workforce rationalisation in the near term.
"In the IT sector, AI and automation have fundamentally changed client expectations demanding greater agility, faster delivery, and continuous innovation. As a result, companies are realigning teams to focus on future-facing mandates. Even beyond IT, businesses are rethinking cost structures and talent strategies to stay competitive in an increasingly AI-first world," said Rahul Veerwal, Founder & CEO of GetWork.
What lies ahead for India's job market
What should we expect over the next two years? "India's job market will face both challenges and opportunities," Sharma predicts. "There will be a surge in demand for professionals skilled in AI, data analytics, cloud computing, and cybersecurity. Hiring will increasingly expand beyond metro cities into smaller towns. Sectors like e-commerce, healthcare, and renewable energy will grow steadily. We'll also see a rise in freelancing and short-term project-based work as companies adopt more flexible work models."
She cautions that in the short term, some roles may become obsolete, especially those that do not align with new technological trends. "However, in the long run, new jobs will be created, particularly those that require advanced digital and technical skills. To succeed, workers must embrace continuous learning and adaptability."
Nasscom also reinforced this view, stating that technology remains a powerful enabler of growth. "Every wave of disruption brings new roles, new value chains, and new opportunities." As of Q4 FY25, more than 1.5 million professionals in India have been trained in AI and GenAI competencies across various levels. Among them, over 95,000 employees in large listed IT firms have completed advanced certifications in areas such as AI-native cloud, embedded AI, and applied intelligence.
Veerwal adds, "The next two years will not be defined by job loss, but by job evolution. The winners will be those who upskill, adapt, and align themselves with emerging digital ecosystems."
