Indian IT Sector Faces ‘Silent Layoffs’: Urgent Action
The Indian IT sector is facing a significant upheaval, with experts predicting that up to 50,000 jobs could be lost by the end of the year due to what is being termed “silent layoffs.” While exact numbers are still uncertain, estimates suggest that around 25,000 positions may be eliminated between 2023 and 2024, with this figure potentially doubling in the current year. The ongoing market conditions, coupled with the rise of artificial intelligence (AI) technologies, are prompting companies to streamline their workforces.
Widespread Silent Layoffs in the IT Sector
The phenomenon of silent layoffs has gained traction in the Indian IT landscape, with major firms discreetly requesting employees to resign or seek alternative employment. Tata Consultancy Services (TCS) recently announced a reduction of 2% of its workforce, equating to approximately 12,000 employees, by March 2026. However, this is just the tip of the iceberg. Many mid-sized technology firms are also quietly letting go of staff without public announcements. One IT professional shared their experience of being abruptly informed of their termination, citing performance issues, and receiving a severance package of three months’ salary. Another employee revealed that they were placed on a list for layoffs and given a three-month grace period to find new employment. Phil Fersht, a chief executive and principal analyst at HFS Research, confirmed that tens of thousands of roles have been phased out across large providers this year, indicating a troubling trend in the industry.
Reasons Behind the Job Cuts
The job cuts in the IT sector are largely attributed to the evolving market dynamics and the increasing reliance on AI technologies. TCS recently reported a reduction of around 6,000 employees, which is about 1% of its workforce, bringing the total number of staff reductions to nearly 20,000. Industry analysts suggest that the actions taken by TCS and Accenture may set a precedent for other companies, as they seek to manage costs while adapting to digital solutions. Employees with varying levels of experience are feeling the impact differently, with those having around ten years of experience facing significant challenges. Many employees previously evaluated under performance improvement programs are now facing unexpected terminations. Instead of direct layoffs, some companies are encouraging voluntary resignations with compensation packages based on specific criteria.
The Shift in Workforce Dynamics
The Indian IT sector is undergoing a fundamental transformation, moving from traditional personnel management to a competency-based organizational structure. This shift is driven by the need for specialized skills and the integration of AI into workflows. As automation takes over routine tasks, many mid-level management positions are becoming redundant, leading to higher turnover rates in these roles. Neeti Sharma, CEO of Teamlease Digital, noted that the outsourcing sector, valued at $283 billion, is grappling with the dual challenges of AI disruption and economic uncertainty. The industry’s reliance on traditional consulting and workforce deployment models is being tested, while companies focused on data, cloud computing, and digital transformation are faring better.
The IT sector‘s current challenges are compounded by external factors, including geopolitical tensions and changing immigration policies in the United States. Proposed increases in H-1B visa fees and new taxes on organizations employing foreign workers are expected to raise operational costs and affect project timelines. As the industry adapts to these changes, the emphasis is shifting towards streamlined structures that prioritize specialized knowledge over hierarchical layers, marking a significant evolution in the Indian IT landscape.
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