AI Invades IT Sector: Detailed Look at TCS's 12,000 Job Cuts and the Altered Landscape of Tech Employment
TCS's Mass Layoffs Reflect the Impact of AI on India's IT Workforce
In July 2025, Tata Consultancy Services (TCS) announced a workforce reduction of 12,261 jobs, affecting about 2% of its workforce. This move, framed as part of transforming TCS into a "Future-Ready" organisation, highlights the complex impact of Artificial Intelligence (AI) on job security within the IT sector in India.
The shift towards AI is not just about eliminating jobs but rather redefining roles. According to the 2025 ServiceNow AI Skills Research, AI is set to redefine over 10 million jobs in India by 2030, including in IT and related fields. While repetitive and rule-based tasks are being automated, AI is augmenting roles such as implementation consultants and system admins, enabling humans to focus on strategic, creative, and innovative work.
However, the near-term reality for many IT workers includes workforce realignments and layoffs as companies invest heavily in AI infrastructure, technologies, and competencies. This "double-edged sword" involves balancing headcount optimization with AI-driven efficiency and innovation.
Large Indian and global tech firms, including TCS, are cutting jobs even as they ramp up AI spending. The job cuts at TCS primarily affect mid-level and senior executives due to automation and tighter margins.
The future for Indian IT workers seems transformative. While some roles may be displaced or consolidated, new AI-related jobs and skill demands are growing. Skills in AI collaboration, problem-solving, and adaptive innovation will be crucial to remaining competitive.
The government is promoting AI skilling hubs, and discussions around unemployment insurance and stronger worker support are gaining traction. Fast-growing roles due to AI include AI engineers, data analysts, and cybersecurity experts, while administrative and repetitive tasks are declining.
Overall, TCS’s mass layoffs in 2025 illustrate the transitional phase Indian IT firms are undergoing—actively deploying AI to redesign workflows and workforce composition, which impacts job security but also creates potential for new roles and career growth in AI-driven technology environments.
Sources:
- 2025 ServiceNow AI Skills Research
- TCS CEO K. Krithivasan's statement on the layoffs
- IBM's projection on automation of back-office roles
- World Economic Forum's prediction on AI job creation and elimination
- Wipro's AI initiatives and investments
- The shift in TCS's operations, driven by AI integration, is steering the company towards becoming a "Future-Ready" organization, impacting not only job security but also career prospects for finance, business, and technology professionals within the company.
- In this transitional phase for the Indian IT sector, education and self-development are crucial as emerging roles in AI engineering, data analysis, and cybersecurity become more prevalent, while administrative and repetitive tasks decrease.
- The government's efforts to establish AI skilling hubs and ongoing discussions about unemployment insurance and worker support aim to navigate the complexities of AI-driven workforce realignments and layoffs, guiding workers towards future career growth opportunities.
