TCS Plans 12,000 Layoffs Amid AI-Driven India IT Shift

In 2025, Tata Consultancy Services (TCS) announced plans to lay off over 12,000 employees, roughly 2% of its global workforce, primarily citing skill mismatches rather than AI-driven productivity gains as the cause. This move signals a broader structural shift in India's IT sector, where AI adoption and changing client demands are reducing the need for traditional roles and increasing demand for specialized AI-ready talent, raising concerns about widening inequality without robust reskilling initiatives. The layoffs have sparked anxiety among employees, with unions accusing TCS of using AI and new bench policies as pretexts for profit optimization, while some workers report forced resignations without proper severance. The trend of AI-driven workforce reductions extends beyond TCS, as companies like Atlassian and Microsoft have also cut jobs citing AI efficiency, amidst criticism over the ethical implications and executive spending priorities. Former Google executive Mo Gawdat warns that AI will lead to widespread job displacement, including among executives, challenging the tech industry’s optimistic narrative of AI creating a 'golden era' of human work. Experts emphasize that the future growth phase depends on blending AI adoption with responsible workforce transitions and policy frameworks to support displaced workers and prevent structural exclusion in the tech labor market.