Infosys, Wipro, other IT stocks fall up to 3% as TCS job cuts deepen concerns over sector slowdown
Wipro
and
Infosys
falling up to 3%, after
Tata Consultancy Services
(
TCS
) said it would cut 2% of its global workforce, around 12,000 employees, amid persistent macroeconomic headwinds and weak discretionary spending. The announcement dragged the
Nifty IT index
1.6% lower, extending losses in a sector already in bear territory.
TCS shares declined 1.7% to Rs 3,081.60 after the company said it could no longer reassign employees whose skills do not match its evolving business needs. 'The deployment of some associates may no longer be feasible under current market conditions,' TCS said, adding that the layoffs were not driven by AI-related efficiency but by structural realignment.
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Wipro fell 3.5% to Rs 250.05, while Infosys slipped 2.2% to Rs 1,482.50.
HCL Tech
edged 1.1% lower and
Tech Mahindra
dropped nearly 1%. The Nifty IT index is trading 24% below its recent peak of 46,088.90.
Challenging outlook
The layoffs, which will primarily affect middle and senior grades, come as clients remain cautious amid trade tensions and a global slowdown in technology spending.
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"The sharp cut in the IT index has been dragging the market down, and there is no respite in this in view of the 2% cut in its global workforce announced by TCS. However, midcap IT names hold promise in view of their strong growth prospects," said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
As of June 2025, TCS employed 613,069 people worldwide. The company said the transition is being managed carefully to ensure client service continuity. Affected employees will receive full notice-period compensation, severance benefits, insurance extensions, outplacement support, counseling, and transition assistance.
Industry slowdown
The job cuts follow legal complaints over TCS's recently revised 'bench policy,' which allows only 35 annual days for employees to remain unassigned before performance-related action and mandates a minimum of 225 billable days annually.
The broader IT industry has also shown signs of stress. Job additions across the top six Indian IT firms fell over 72% in the April–June quarter, with only 3,847 new hires compared to 13,935 in the previous quarter, according to a report by ET.
Despite the turbulence, TCS reaffirmed its commitment to long-term priorities such as investments in new-age technologies, AI deployments, deeper global partnerships, and the development of next-generation infrastructure.
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TCS shares slip nearly 2% after company announces over 12,000 layoffs
(
Disclaimer
: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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