Silent Layoffs Tighten Grip on India’s Tech Sector in 2025: 50,000 IT Jobs at Risk as AI Reshapes Workforce

India’s IT Industry Faces a Quiet Crisis

A wave of “silent layoffs” is sweeping across India’s technology sector in 2025, with estimates suggesting that nearly 50,000 tech jobs could disappear by the end of the year. Industry experts say the trend—marked by discreet firings, forced resignations, and performance-linked exits—signals a structural shift as companies race to adapt to automation and artificial intelligence (AI).

While Tata Consultancy Services (TCS) drew attention in July by announcing plans to cut 2% of its workforce (around 12,000 employees) by March 2026, many other large and mid-sized IT firms have quietly followed suit. Between 2023 and 2024, about 25,000 employees were let go, and experts predict that number could double this year.

Inside the ‘Silent Layoff’ Culture

Employees describe the process as abrupt and opaque.

“I was called in by HR and told I was no longer required,” said an IT professional with three years of experience. “It was my last day immediately. They said it was performance-related and offered three months’ severance pay.”

Others say they were given grace periods to find new jobs, with little support or explanation. The practice allows companies to cut costs quietly, avoiding negative publicity.

According to Phil Fersht, CEO and Chief Analyst at HFS Research, “Tens of thousands of roles have been quietly phased out across large providers this year through performance-linked exits, reduced hiring, and delayed promotions.”

AI and Automation Drive Workforce Restructuring

The Indian IT industry, valued at $283 billion, is at a crossroads. Rapid adoption of AI tools and automation has made several routine engineering roles redundant.

“Legacy platforms are weakening, and firms are now seeking specialised digital skills,” said Neeti Sharma, CEO of Teamlease Digital. “In 2025 alone, the number of job cuts and role transitions could reach 55,000–60,000.”

Automation is especially affecting mid-level managers, many of whom were promoted for people management rather than technical innovation.

“As AI takes over reporting and coordination, mid-level roles are being squeezed the hardest,” Sharma explained. “The pyramid model of IT firms is collapsing in favour of flatter, skill-based teams.”

Major IT Firms Under Pressure

Since July, Accenture and TCS have together announced 23,000 global job cuts. Accenture has rolled out an $865 million business optimisation programme, reducing 11,000 employees globally between June and August.

At TCS, about 6,000 employees (1% of its workforce) were “released” in the September quarter alone, with a net headcount reduction of 19,755. The company’s total workforce now stands at 593,314.

An insider at a top IT firm told ETtech that HR departments are sending hundreds of emails daily to retrieve laptops and deactivate employee accounts—an indication of large-scale but quiet restructuring.

AI Reshaping the IT Pyramid

For decades, Indian IT companies operated on a pyramid model, hiring large batches of freshers and layering multiple levels of management. But with AI-driven automation streamlining processes, this model now appears “bloated,” Sharma said.

Firms heavily dependent on legacy consulting and people deployment are the most affected, while those focusing on cloud, data, product development, and AI transformation continue to hire selectively in niche areas.

Fersht predicts that overall headcount may remain flat even if revenues rise, as AI-driven productivity offsets human workforce growth.

Hiring Slowdown and Policy Headwinds

The top five Indian IT firms added only 11,200 employees in FY25, far below early-year expectations of 180,000 new hires. Hiring projections for the July–December period have been cut by 2–3%, reflecting weak global demand.

Compounding the challenge are US policy changes, including higher H-1B visa fees and the proposed HIRE Act, which taxes companies employing foreign workers. Analysts warn that these could inflate costs and delay new projects, forcing firms to rebalance their workforce.

Industry Enters AI-Led Transformation Era

Experts agree that this wave of layoffs isn’t merely about cost-cutting—it’s about realignment for the AI age.

“These are not simple job cuts,” said Fersht. “They represent a deeper shift towards AI-driven operations and digital priorities.”

As the IT sector transitions from managing people to managing skills, India’s traditional outsourcing model is evolving into one driven by specialisation, automation, and efficiency.

The transformation may be painful in the short term, but analysts believe it will reshape the Indian IT industry for a more sustainable, AI-powered future.