The Indian IT industry is going through a tough phase. Revenues are falling short of expectations, profit margins are under pressure, and overall profitability is declining. Even though companies are receiving new orders, clients are delaying payments and holding off on spending for non-essential services.
Tata Consultancy Services (TCS), India’s largest IT firm, has already announced job cuts. It plans to reduce its workforce by 2%, which equals about 12,000 employees. Most of those impacted are employees who have been on the bench for over 35 days and have not upgraded their skills in emerging areas like artificial intelligence (AI).
Last year, the Indian IT industry generated $500 billion in revenue. Out of this, IT services contributed $250 billion, growing at 5%. However, this year, the growth rate is expected to slow down significantly to just 0–3%.
According to industry body Nasscom, around 54 lakh professionals are currently working in IT services, business process management (BPM), and R&D services. By 2030, over 80% of these roles are expected to become digitally driven. But in the short term, job losses are a growing concern. Experts estimate that around 2–5% of the IT workforce may lose their jobs. This could mean that between 1 lakh to 2.7 lakh employees could be laid off.
Attrition rates—employees voluntarily leaving their jobs—have also increased among the top six IT companies. Over the past year, these rates have gone up by 150 to 200 basis points. Layoffs are likely to begin with bench employees—those without current project assignments—and may later affect underperforming staff.
MeitY Responds to TCS Layoffs: IT Industry Still a Net Hirer
The Ministry of Electronics and IT (MeitY) has said that layoffs in the IT sector are a normal part of the industry, driven by changing skill needs and evolving talent demands. Despite the job cuts, the Indian IT industry continues to hire more people than it lets go. To support workers and help them stay relevant, the government is running programs like FutureSkills PRIME, which focuses on reskilling and upskilling IT professionals in emerging technologies.
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