TCS layoffs: Why India's IT dream needs a wake-up call in the age of AI
Unsurprisingly, therefore, the IT sector has traditionally been the most straightforward and sought-after path to upward economic mobility and prosperity for India's legions of engineering graduates, and any dip in the employment prospects of this sector is likely to have significant ripple effects on India's economy and politics. Coupled with several other more bombastic statements by global giants like Meta and Salesforce on the reduced need for entry-level engineers and a turbulent business outlook for India's IT sector, an anxiety-inducing cocktail is born. In this context, there are three key takeaways from TCS layoffs to keep in mind.
First, it is of course entirely likely that these layoffs are not caused by AI. Net hiring by India's IT giants has been going down for several quarters, partly to balance the aggressive hiring spree in the aftermath of the Covid pandemic, and partly due to a more volatile global economy, which has reduced spending by potential clients. This slowdown in hiring is not limited to the IT sector. That said, there are also other emerging industries, particularly Global Capability Centres (GCCs), which now employ nearly 2 million, and the startup ecosystem, which are fast becoming attractive alternative employment pathway for young engineers. We are not even sure what the actual impact of AI on employment and labour force participation globally has been so far, so it might be a little premature to lay the blame for these cuts at AI's feet.
Second, this does not mean that AI will not have an impact on India's IT sector. Historically, our IT giants have based their offerings on India's labour cost advantage, relying on the hundreds of thousands of engineers who graduate every year to provide standardised, relatively low-skilled services mostly in support functions at a fraction of global costs, best exemplified by the fact that starting salaries in the IT industry have not changed in a decade. AI can already do nearly everything that fresh hires in the sector are expected to do, and if the cost structures allow, there is very little reason for IT companies to keep hiring tens of thousands of fresh graduates a year. It can be reasonably expected that net hiring in these companies will no longer reach the levels seen in the last couple of decades, and any excess workforce, the so-called 'bench' in IT HR parlance, will be systematically trimmed.
Third, the anxiety surrounding a single company's lay-off decision is indicative of a much larger issue in the Indian economy – the fact that quality employment opportunities have not kept pace with economic growth rates and the growing aspirations of India's youth. Low wage levels in the private sector and growing living costs have made India's middle class more precariously placed than ever before, indicated by the rapidly expanding use of personal debt for consumption and basic necessities.
The advent and increased use of AI will also change the nature of jobs that are likely to remain relevant. Demand, even within the IT space, is shifting from entry-level testing and support work to domain specialists in areas like cybersecurity, cloud computing, full-stack capabilities and AI itself. There is also growing demand for personnel in sectors like data centre management and chip design. While these jobs are likely to be high-paying, they will require significant investments in education and can never reach the employment numbers of the IT sector. With manufacturing not taking off as expected and the narrowing opportunities in IT, fresh graduates, particularly from Tier-II and Tier-III colleges, might increasingly feel bleak about their employment opportunities.
The anxiety around TCS layoffs should be seen in the larger context of the structural issues within the Indian economy. Mitigation of any potential negative fallout due to widespread AI adoption on an already stressed workforce will require a multipronged approach, including a rapid, affordable skilling programme, a complete overhaul of India's higher education system, and policy incentives to boost other sectors, particularly emerging areas like biotech, pharmaceuticals and advanced manufacturing. No longer can one sector take on the burden of upholding India's middle class and economic prospects the way that IT has in the past. More diversified, well-paying employment opportunities will only strengthen the Indian economy during an uncertain time.
Shashank Reddy is Managing Partner, Evam Law & Policy
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Time of India
an hour ago
- Time of India
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The Hindu
an hour ago
- The Hindu
CM calls on Student Police Cadets to continue fight against drug abuse
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First Post
an hour ago
- First Post
Myanmar military courts cracks down on human trafficking, 12 sentenced to life imprisonment
Myanmar's military courts have sentenced 12 individuals, including five Chinese nationals, to life in prison for human trafficking offences, including forced marriages and online sex tape distribution, state media reported Saturday. read more According to state-run media on Saturday, Myanmar military courts have sentenced twelve people, five of whom are Chinese, to life in jail for their roles in several human trafficking cases. The convictions are related to a variety of offences, such as the trafficking of Myanmar women into forced marriages in China and the online dissemination of sex tapes, the Myanma Alinn newspaper reported. In one case, a military court in Yangon, the nation's largest city, sentenced five individuals, including two Chinese nationals known as Lin Te and Wang Xiaofeng, to life in prison on July 29. They were convicted of creating sex tapes featuring three Myanmar couples and posting the footage online for financial gain in violation of Myanmar's Anti-Trafficking in Persons law. STORY CONTINUES BELOW THIS AD In a separate case, the same court sentenced a woman and three Chinese nationals, Yibo, Cao Qiu Quan and Chen Huan. The group was convicted of planning to transport two Myanmar women, recently married to two of the convicted Chinese men, into China, the report said. Additionally, three other people received life sentences from a separate military court for selling a woman as a bride to China, and for attempting to do the same with another woman. In another case, a woman from Myanmar's central Magway region was given a 10-year sentence on July 30 for planning to transport two Myanmar women to be sold as brides to Chinese men, the report said. Human trafficking, particularly of women and girls lured or forced into marriages in China, remains a widespread problem in Myanmar, a country still reeling from civil war after the military seized power from the elected government of Aung San Suu Kyi in February 2021. The persisting conflict in most areas of Myanmar has left millions of women and children vulnerable to exploitation. A 2018 report by the Johns Hopkins Bloomberg School of Public Health and the Kachin Women's Association Thailand (KWAT) — which works to prevent and respond to trafficking in northern Kachin and Shan states bordering China — estimated that about 21,000 women and girls from northern Myanmar were forced into marriage in China between 2013 and 2017. STORY CONTINUES BELOW THIS AD In its latest report published in December, KWAT noted a sharp decline in the number of trafficking survivors accessing its services from 2020 to 2023. It attributed the decline to the COVID-19 pandemic and border closures caused by ongoing conflict following the army takeover. However, it reported a resurgence in 2024 as people from across Myanmar began migrating to China in search of work. Maj-Gen Aung Kyaw Kyaw, a deputy minister for Home Affairs, said during a June meeting that the authorities had handled 53 cases of human trafficking, forced marriage and prostitution in 2024, 34 of which involved China, according to a report published by Myanmar's Information Ministry. The report also said that a total of 80 human trafficking cases, including 14 involving marriage deception by foreign nationals, were recorded between January and June this year.
