TCS Enters The Tech Layoff Wave With Microsoft, Intel – AI Or Attrition To Blame?

News18

6 days ago

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The global tech industry is undergoing a massive shake-up. In just the first half of 2025, over 94,000 tech workers have lost their jobs
Tech Job Cuts 2025: The global tech industry is undergoing a massive shake-up. In just the first half of 2025, over 94,000 tech workers worldwide have lost their jobs, averaging about 507 roles eliminated per day, according to multiple reports. From Microsoft and Intel to Meta and TCS, companies are announcing large-scale layoffs as they adapt to an AI-first, leaner future.
AI: The Convenient Culprit?
Artificial intelligence is at the center of this narrative. Executives such as Amazon CEO Andy Jassy have acknowledged that AI efficiencies will inevitably lead to a leaner workforce. Others, however, push back on the notion that AI alone is driving job cuts.
For instance, TCS CEO K Krithivasan recently told Moneycontrol that the company's plan to cut 12,000 jobs — about 2% of its global headcount — is not because of AI productivity gains. Instead, he attributed the move to skill mismatches and limited deployment feasibility, especially among middle and senior-level employees.
'This is not because of AI giving some 20 percent productivity gains. We are not doing that," Krithivasan said, adding that the layoffs were part of a broader transformation to make TCS a 'future-ready organisation."
Despite upskilling over 550,000 employees in AI and emerging tech, not all staff could transition effectively into TCS's evolving operating model. Many were trained in legacy systems and found it difficult to align with product-led, agile structures.
Even as Microsoft hit record highs in the stock market, it has laid off over 15,000 employees so far this year. The cuts were primarily focused on non-technical roles like sales and regional support. CEO Satya Nadella, in a memo cited by The Economic Times, explained that the company must 'align with long-term strategic goals" centered around AI, cloud, and enterprise tools.
Microsoft is reportedly encouraging all employees to integrate Copilot AI tools into daily workflows and is revamping performance metrics to include AI usage. Traditional sales roles are being replaced with 'solution engineers", trained in technical demos and AI implementation.
Intel: Up to 24,000 Jobs Slashed
Intel is also reducing its workforce drastically — cutting up to 24,000 jobs or nearly 25% of its global staff. New CEO Lip-Bu Tan admitted on an earnings call that the company had overestimated demand and that automation had become necessary to boost efficiency. Intel is also halting new projects in Germany and Poland and relocating operations from Costa Rica to Vietnam, impacting an additional 2,000 roles.
While many firms are vague about AI's role in workforce reductions, a few are more transparent. IBM revealed that 200 HR jobs were replaced by AI tools, while Klarna CEO Sebastian Siemiatkowski told CNBC that the company shrank from 5,000 to 3,000 employees after adopting AI systems.
Meta also reduced its workforce by 5% earlier in 2025, citing increased automation as a key driver. The company's Reality Labs division, which works on AR/VR technologies, was among the most impacted.
Meanwhile, Panasonic announced 10,000 global layoffs, attributing the decision to a strategic shift toward AI-powered product development.
Some analysts argue that AI is being used as a convenient scapegoat for broader cost-cutting and restructuring strategies. Jason Leverant, President of AtWork Group told CNBC, 'Firms laying off as they adopt large-scale AI is too coincidental to ignore."
Christine Inge, a workforce strategist at Harvard, added, 'Being direct about AI displacement provokes backlash from employees and regulators. Remaining vague helps control optics during transition."
She noted that while AI is accelerating the shift, economic slowdown, changing client expectations, and skills gaps are just as responsible. 'Job losses will be extremely large. The only thing we can do as individuals is adapt," Inge told CNBC.
Not Just AI – But AI Is a Catalyst
Whether it's TCS, Microsoft, or Intel, the layoffs of 2025 are clearly part of a deeper transformation. AI is undeniably a catalyst — streamlining operations, reducing redundancy, and reshaping business models — but it's not the sole cause.
Instead, a mix of automation, cost pressures, macro uncertainty, and the need for organizational agility is driving the global wave of tech layoffs.
Location :
New Delhi, India, India
First Published:
July 28, 2025, 12:09 IST
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