List of companies
📉 The Problem: Sector Slowdown Thus far this year, until mid-2025, the Nifty IT index fell ~14% YTD, with leaders like TCS down by around 21%, remaining significantly below 52-week highs. Broader Indian equity markets fell in late July mainly due to steep drops by IT stocks, with Coforge, PersistentRead more
- 📉 The Problem: Sector Slowdown
Thus far this year, until mid-2025, the Nifty IT index fell ~14% YTD, with leaders like TCS down by around 21%, remaining significantly below 52-week highs.
Broader Indian equity markets fell in late July mainly due to steep drops by IT stocks, with Coforge, Persistent, Infosys, and others guiding indices lower.
- 🧠 Tech Transformation & Workforce Changes
TCS made a 2% employee cut (~12,000 positions), particularly within mid-to-senior management, as part of automation and AI-driven changes.
Overall hiring has seen a massive swing: whereas best firms employed only 4,787 net individuals in Q1 FY26 compared to 50K+ a while back, hiring these days is for specialists—AI, cloud, cybersecurity—rather than new-batch individuals.
- 🚀 AI Disruption & Emerging Roles
Automation is capturing monotonous activities. Junior roles—programming, debugging, call-center—are being slowly replaced with AI programs and copilot systems, redefining IT and BPO sectors.
On the other hand, multinationals are growing reliant upon India’s Global Capability Centres to provide high-value AI engineering, analytics, and innovation work.
🔍 Key Implications at a Glance
Stakeholder | Impact Summary
Investors | Large cap IT stocks seen as less defensive; stress may persist until sector pattern stabilizes. Mid-cap IT stocks with emphasis on AI may be worthwhile.
Employees | Decreasing traditional roles—highlight upskilling for AI, ML, cybersecurity, cloud. Increasing specialist requirements
Job Seekers | Recruitment at entry level declines significantly; need for specialisation rather than generalists. Upskilling imperative.
Industry Outlook | Short-term challenges aside, spending enabled by digital & AI will fuel long-term growth. Nasscom & CXO surveys foresee modest growth ahead.
🧭 Why This Matters:
India’s $280 billion IT services sector is witnessing its biggest structural change in a decade: automation emerging as a alternative to scale-related hiring, and product lines with a focus on AI-first, domain-exclusivity-based service offerings.
TCS’ layoffs are a milestone event—the start of a planned convergence to global tech trends rather than a defensive downsizing.
✅ Takeaways
- Information technology sector is at a crossroads where talent quality matters most as opposed to talent volume.
- Ongoing training in AI, cloud, and cybersecurity is not optional to stay current.
- For investors, mid-cap nimble players riding the AI wave could have higher risk-reward than legacy giants.
Tata Consultancy Services (TCS) Laid off over 12,000 employees—its largest workforce reduction ever. Cited skill mismatches and an AI-driven structural shift as key reasons. Simultaneously, it raised salaries for about 80% of its remaining staff to retain critical talent. Microsoft Conducted multiplRead more
Tata Consultancy Services (TCS)
Laid off over 12,000 employees—its largest workforce reduction ever. Cited skill mismatches and an AI-driven structural shift as key reasons. Simultaneously, it raised salaries for about 80% of its remaining staff to retain critical talent.
Microsoft
Conducted multiple rounds of cuts, including about 6,000 positions in May and a further 9,000 in July (approx. 4% of its workforce) to streamline operations amid heavy AI infrastructure investments.
Intel
Announced layoffs affecting around 24,000 employees—roughly 15% of its workforce—as part of a broader restructuring and scaling back of planned chip fab projects.
Meta, Amazon, Nextdoor, Scale AI, Morgan Stanley, Peloton
All have enacted significant staff reductions in 2025, driven by cost optimization and AI integration efforts.
Eater (Dallas-based food media outlet)
Eliminated its entire Texas-based editorial staff, leaving just one contract writer. The move reflects the collapse of traditional media amid AI content dominance.
Journalism Sector (e.g., Business Insider, ITV, Press Association, MSNBC)
Faces widespread job cuts in both the UK and US, attributed to macroeconomic uncertainty and declining Google referral traffic.
NACCHO (National Association of County and City Health Officials)
Reduced its workforce by 43 employees due to federal funding cuts and grant delays, impacting public health programs.
Pet+ER Columbia (Emergency Veterinary Clinic)
Will close its Hunt Valley location in September, laying off 42 employees—a blow to local veterinary services driven by tightening economic conditions and decreased government spending.
Retail Chain: River Island
Proposed closing 33 stores, potentially risking hundreds of jobs, as part of a court-approved restructuring plan amid rising costs and shifting consumer habits. Closures slated for January 2026, aiming to align with peak trading periods.
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