AI-driven automation and global economic uncertainty push top IT companies to shrink hiring; TCS to cut 12,000 jobs
Mumbai | Economy India : India’s largest IT services firm, Tata Consultancy Services (TCS), has announced its largest-ever workforce reduction, planning to cut nearly 12,000 jobs globally—equivalent to 2% of its workforce. This move comes amid the rise of artificial intelligence (AI), automation, and global macroeconomic uncertainties, signaling a dramatic shift in the country’s tech employment landscape.
According to company insiders, the layoffs will primarily impact mid to senior-level employees, as TCS looks to optimize its human resource strategy in a rapidly changing tech ecosystem.
This announcement comes as a broader trend in the IT sector. In the April-June quarter of FY26, 4 out of the top 6 Indian IT firms reported a decline in workforce size. Only Infosys and Tech Mahindra showed marginal staff increases, while others like HCL Tech, LTI Mindtree, and Wipro saw reductions.
AI Takes a Toll on Jobs, Hiring Activity Slows
HCL Technologies CEO C. Vijayakumar, in a July 14th analyst call, acknowledged the role of AI and automation in driving these decisions. “We have let go of a significant number of employees due to automation efficiencies,” he said.
Jefferies, the global investment firm, has warned that the trend of layoffs could intensify further as AI continues to disrupt traditional IT roles, especially those involving manual or repetitive tasks.
Snapshot: Q1 Workforce Changes Across Top IT Firms
| Company | Q1 FY25 (Net Additions) | Q1 FY26 (Net Additions/Reductions) |
|---|---|---|
| TCS | ▲5,452 | ▼12,000 (approx) |
| Infosys | ▲1,908 | ▲210 |
| HCL Tech | ▼8,080 | ▼269 |
| Wipro | ▲297 | ▼114 |
| LTI Mindtree | ▲284 | ▼418 |
| Tech Mahindra | ▲2,165 | ▲214 |
Source: Company Filings
What Lies Ahead?
Experts believe that while AI and automation will eventually create new roles, the current transition phase is likely to be painful for many tech professionals. Companies are now prioritizing leaner teams with AI proficiency, and hiring is being restructured accordingly.
The Indian government and industry bodies are being urged to reskill the tech workforce and support displaced employees as the digital revolution accelerates.
(Economy India)
