TCS layoffs: Is it Code Red for Indian IT talent?

Time of India

5 days ago

Bengaluru: TCS laying off 12,000 employees—largely at mid and senior levels—has sent shockwaves across the industry. This move challenges the long-standing perception of TCS as a company known for job security and stability.
The Indian IT sector is currently undergoing a structural shift, mirroring global trends where major tech firms are streamlining resources, improving cost efficiency, reallocating assets, and shutting down divisions that no longer align with strategic priorities.
India's IT sector is in the early stages of a significant reset. Industry experts attribute this transformation to mounting margin pressures, prompting companies to control costs by reducing headcount.
Many believe that AI is disrupting the traditional workforce pyramid, replacing broad-based hiring models with leaner, more specialised structures which yield higher billing. As a result, the future of services will rely heavily on a blend of newer technologies and human ingenuity, where billability is determined by the premium clients are willing to pay for niche skills rather than volume of resources.
TCS has said its restructuring efforts are aimed at making the company future-ready.
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As part of this initiative, sources told TOI the company has begun focusing on employees who have remained unbilled—commonly referred to as being on the "bench"—for extended periods, typically ranging from 3 to 18 months. These individuals, many of whom have between 3 and 10 years of experience with the firm, are being either relocated or let go.
This has sparked concerns within the industry over the potential for a wave of sudden and unexpected exits.
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Several employees who spoke to TOI on condition of anonymity said those impacted had been on the bench for anywhere between three months and 1.5 years. In one case, an employee claimed she was called into a meeting where three HR representatives handed her a "discharge letter" and asked her to resign. "It was sudden and shocking. There was no prior intimation," she said.
TCS, however, maintains that it has consistently offered relocation and retraining options to benched employees to enhance their chances of being deployed on projects.
"As a longstanding regular practice, the options of relocations and retraining are provided to employees who have been on the bench for a long time without a project, to best utilise their skill sets and provide them career advancement opportunities," the company said in a statement.
Meanwhile, lateral hires awaiting onboarding have reported uncertainty. In response to one such candidate, a TCS HR executive reportedly said, "Do not wait for TCS.
New announcements are going on. We are helpless," suggesting that onboarding timelines are unclear amid ongoing changes.
According to IT industry body Nasscom, the sector is at an inflection point as AI and automation become central to business operations. "Over the next several months, we anticipate some transitions as organisations pivot toward product-aligned delivery models, driven by rising client expectations around agility, innovation, and speed," it said in a statement.
"This shift is likely to reshape traditional service delivery frameworks and, in the near term, may lead to some workforce rationalisation as traditional skillsets are re-evaluated.
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Nasscom added that, as of the March quarter of FY25, over 1.5 million professionals have been trained in AI and GenAI across various levels. More than 95,000 employees in leading listed companies have undergone advanced skills in areas such as AI-native cloud, embedded AI, and applied intelligence certifications.
"Hiring trends will continue to evolve, with increasing demand for deep, specialised expertise.
There is no one-size-fits-all solution; each enterprise will navigate this transition based on its unique strategic needs," the statement added.
Indian campuses are facing a stark dichotomy—freshers without job offers on one side, and large salary packages on the other. The recent layoffs at TCS have sounded an alarm across the industry.
Global capability centres( GCCs) continue to lead recruitment efforts as Indian IT companies adapt to a major transformation in the technology landscape. Even as upskilling becomes part of everyday work life, lower net additions are making engineering graduates anxious.
Indian campuses today present a stark contrast: while some students receive lucrative offers, many others are left without any. For computer science students in particular, the future is deeply intertwined with AI, offering exciting opportunities but also demanding rapid adaptation.
Ramkumar Ramamoorthy, partner at tech growth advisory firm Catalincs, said, "In the context of digital and AI, there is a crying need for India to reimagine its higher education to stay relevant. Beyond STEM programmes, we must integrate AI across disciplines—liberal arts, law, medicine, management, and social sciences. The only way to do this at scale is through collaboration with industry experts and practitioners.
Otherwise, we risk producing graduates who are misaligned with market needs, potentially leading to serious social implications."
K N Subramanya, principal of Bengaluru's R V College of Engineering, noted that for tier 1 colleges, companies are focusing on hiring for specialised roles rather than mass recruitment drives. "There's no doubt the industry is undergoing a major reset, and students must adopt a strong learnability mindset," he said. "We have introduced AI in the first year, along with hackathons and new challenges, to foster a culture that embraces continuous change.
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