His comments came in response to TCS, India’s largest IT services firm, announcing it would lay off 2% of its workforce—about 12,000 people, mostly at the mid- to senior-levels, across the current financial year.
TCS insists the move isn’t about AI replacing jobs, but rather a mismatch between the available skills and deployment feasibility. CEO K Krithivasan told Moneycontrol that this is not about 20% productivity gains from AI, but about realigning the workforce to current business needs.Still, the broader context can’t be ignored. Post the hiring spree during the Covid-19 book, headcount of Indian IT companies have seen a decline in the last two years. TCS’ headcount has declined by 2,249, while Infosys and Wipro have seen a decline of over 12,000 and 25,000 employees respectively.
Earlier this month, HCLTech said it was restructuring its workforce due to skill and location mismatches. Now, the layoffs are drawing public scrutiny, as the industry grapples with an AI-inflected shift in both business models and manpower requirements.
Former NASSCOM Chairman Ganesh Natarajan sees the shift as long overdue and inevitable. Citing the World Economic Forum’s Future of Jobs report, he noted that while millions of jobs will be made redundant, a new class of jobs will emerge.“My own bet is that a million roles in IT—testing, documentation, low-level coding—will become redundant. But equally, we’ll see new roles being created,” he said. Natarajan underscored that agentic AI, where software autonomously performs complex tasks, will force companies to rethink how teams are structured from top to bottom. “The pyramid model? It belongs in Jurassic Park,” he quipped.
Still, he believes this churn will create new opportunities: in startups, in platform-driven delivery, and in co-creation with clients. “It’s not the end of employment; it’s a reset,” he said.
Girish Pai, head of research at Bob Capital Markets, argued the layoffs may not be driven by AI alone—at least not yet. He pointed out that AI currently impacts lower-level jobs more, while TCS’s cuts are at the mid- and senior-levels.
“My sense is this is tied to market share shifts and vendor consolidation, where companies like TCS may be on the losing end,” he said. Pai suspects redeployment challenges—rather than automation—may be the immediate trigger.
That said, he cautioned that entry-level jobs in BPO, testing, and customer experience are most at risk in the next phase of automation, and large firms like TCS, Infosys, and HCLTech are likely to feel the pressure more than smaller peers. Going forward, he sees sector growth settling at 4-5%, far below the 15% spikes seen during the post-pandemic digital transformation wave.
Also Read: TCS shares fall in reaction to the layoff news; management says skill mismatch behind move
