India’s information technology (IT) sector has long been a key pillar of the country’s economic growth. It is not only the largest source of service exports but also provides high-paying employment to millions of educated youth. However, in recent years, it has been experiencing a profound upheaval. Tata Consultancy Services’ (TCS) planned cut of approximately 20,000 jobs in 2024–25 has shaken the entire industry. This is not just a single company’s administrative decision, but a sign of a broader structural transformation underway in the Indian IT sector.
This change is being driven by the rapid expansion of artificial intelligence (AI), machine learning, and automated systems. Tasks that once required hundreds of employees are now being accomplished in minutes by automated technology. Tasks like software development, testing, and customer service are now being performed more efficiently by “agentive AI” systems. This has increased company productivity but reduced the need for human labor—and this is the primary reason for these silent layoffs.
Companies like TCS, Infosys, Wipro, and Cognizant are now moving away from the old “outsourcing” model and toward a “value-based digital services” model. This shift is directly impacting middle-level employees, whose skills are limited to traditional technologies. They are unable to adapt to new AI-based systems. This skill mismatch is the root cause of this crisis.
AI-based tools have rendered middle management and support roles in the software industry virtually irrelevant. Where large teams were once required for “ERP management” or “system maintenance,” these tasks are now handled by a few programs and cloud automation systems. For companies, this is a cost-cutting tool, but for millions of employees, it has become a source of insecurity.
This trend isn’t limited to India. Technology industries in the US and Europe are also undergoing significant changes due to budget cuts and trade protectionism. Foreign clients now seek technology-based solutions rather than human labor-intensive services. Furthermore, H-1B visa fee hikes and local hiring policies in the US have made it difficult for Indian companies to hire employees abroad. All of this is forcing companies to reduce their domestic workforce as well.
India’s top five IT companies are projecting approximately 50,000 job losses between 2023 and 2025. Companies attribute this to “improved work efficiency,” but the reality is that human resources are being reduced. This is not only an economic challenge but also a social concern, as the IT sector employs the country’s most educated and organized segment.
Still, this change can’t be entirely negative. Every technological revolution brings with it opportunities. Artificial intelligence has opened up new fields—such as data science, cloud engineering, cybersecurity, and AI model building. The question isn’t that jobs are disappearing, but that old skills are becoming irrelevant and new skills are becoming increasingly in demand.
Now there is a need for the government, industry and education sector to make coordinated efforts together.
First, a nationwide “digital retraining campaign” must be launched. TCS itself has provided basic AI training to 550,000 employees and enrolled 100,000 in advanced training. If this model is replicated in other companies and government schemes, a large number of professionals could be reskilled.
Secondly, technical education institutions must fundamentally change their curriculum. No longer just programming or networking, but topics like AI ethics, product thinking, data analytics, and creative problem-solving must be part of education. By incorporating these subjects under the New Education Policy (NEP), youth can be prepared for the technologies of the future.
Third, social security structures must be strengthened. Employees facing layoffs should be provided with severance packages, retraining subsidies, and mental health support. Most private sector employees in India are outside any formal protection system. Therefore, the government should launch initiatives such as the “Digital Employment Security Fund” or the “Techno-Employee Insurance Scheme.”
Fourth, large-scale skill training centers should be established through a public-private partnership (PPP) model. Ed-tech companies, NASSCOM, and state governments should jointly launch regional training missions to teach new skills to unemployed technical professionals.
Fifth, innovation and the start-up culture must be further encouraged. Promoting AI-based product development and deep-tech entrepreneurship can create new jobs. The government should better coordinate the “Start-up India” and “Digital India” initiatives. If India can transform its youth into “job creators” rather than “job seekers,” this crisis can be turned into an opportunity.
Additionally, companies must inject sensitivity into their human resources policies. Practices like “silent layoffs” or “forced terminations” undermine employee morale. Technological advancement is meaningful only when it maintains a balance with human values.
India currently has a unique opportunity. We have the world’s largest young technical workforce. If this workforce is trained with the right direction and skills, India will not only remain a hub for IT services but can also play a leading role in the global era of artificial intelligence. To this end, a long-term “National Digital Skills Mission 2030” should be outlined.
Events like the TCS layoffs remind us that sustainability in the technological age is only possible through continuous learning and adaptation. In the coming decade, only those companies that value human skills—such as judgment, creativity, and ethical thinking—in addition to technical proficiency will succeed.
India’s IT sector has built its global reputation on quality, innovation, and trust. This trust can only be maintained if the industry views its employees as partners, not just “resources.” It’s time for the government to formulate a “Technology Employment Policy” that balances both innovation and security.
Technological revolutions always present societies with two choices—either to evolve with them or be crushed under them. It’s time for India to adapt to this change. If the country can handle this challenge with vision and policy coordination, this period of retrenchment can become a new opportunity for the future.
Author is a Research Scholar. She can be mailed at saurabhpari333@gmail.com
