TCS layoffs : Is this the beginning of a recession? Can talent remain employable?

If you haven’t been living under a rock then you must be already aware of it, TCS has officially announced that they will be laying off around 12,000 employees. Now, the company is not directly stating that it is because of new AI technologies which is fairly good at some of the tasks one does at office, but it doesn’t take much effort to read the room.

TCS layoffs

TCS officially announced in the late July 2025 that they will be laying off 12,000 employees, representing about 2% of over 613,000 head counts as of June 2025. This marks the beginning of the era where AI tools will be replaced with the primary targets of the layloffs; the middle and senior level staff of the company. Their reason? Well, sources all accross India have reported that it is all part of a strategic initiative to become a ” future ready ” organizaton. But does this mean IT jobs will be diminished? Not at all but there is definitely a rocky road ahead.

This announcement has sparked a controversy across the nation. The Karnataka State IT Employees Union (KITU) has raised a strong objection to the layoffs. The Union demanded criminal proceedings against officials involved in the violations and immediate action from the Labour Department to ensure justice for the affected employees. Social media debates all over the world has been intensified too, along with pictures of TCS employee going viral, sleeping outside the pune office on the footpath who was promised that his salary would be processed by July 31, but no action followed. This lead him to vacant his accommodation due to not being able to afford it.

Attempt at support measures

TCS is providing several support measures for the affected employees including severance packages ranging from 3-5 months salary depending on their seniority, with a proper notice period compensation, insurance coverage and even assist with outplacement.

The thing is, no IT company has made a major decision like this. The country which is celebrated for its IT skills, we don’t even have a proper operating system for phones or computers. In fact, we don’t have a proper indian chatting app, browser, a popular video game, and when it became clear that the next wave in technology is revolved around AI, these Indian IT giants, instead of fighting against it, slumbered down to it. This will only gather pace, soon this will seep into the other professions too. Human work or human skill will be still needed, required even, for AI might give them 20% productivity gains but not creation, not novelty, then again for that you might not need a whole lot of employees.

Many questions arises

Did the Indian IT companies miss the bus? Are they not future ready for the ever-evolving technological advancements across the globe? Is AI the only driving factor for the layoffs, or there is a severe skill gap amongst the exisiting employees which were overlooked and now they become dispensible in the challenging global scenarios and tough competion in the market ,due to lack of skill sets? Does it mean that the skill gap analysis, employee performance review and feedback system, upskilling of exisiting employees or strategic recruitment for new skill sets was not good enough? Doesn’t it also question the lack of strategic vision of senior-most IT leaders and their hiring strategies ? or it’s sort of complecency , that we are sort of indespensible to the client ? This 12,000 job cut may just tip of the iceberg and many more to come in future and we may get the answers to all the questions.