It is the kind of statistic that stops readers in their tracks: more than 11000 jobs gone at Accenture in just one quarter, another 12000 on the block at TCS, and restructuring signals flashing at HCLTech. In boardrooms and WhatsApp groups alike, the shorthand has become clear—India’s IT engine, long seen as immune to downturns, is shedding people at a pace not witnessed in over a decade. The numbers are real, the severance cheques hefty, and the uncertainty palpable. Yet behind the drama of retrenchment headlines lies a more nuanced reality: this is less a story of decline than of transformation. The sector is not collapsing; it is recalibrating.
Recognising the Scale—Without Losing the Plot
Numbers matter because they anchor public perception. TCS’s announced cut of around twelve thousand roles is tied not to financial distress but to a new bench policy that limits unassigned employees to thirty-five days before redeployment or exit. Accenture’s decision to cull over eleven thousand positions in the June–August quarter came with a severance bill of roughly $615 million, with another $250 million earmarked for the current quarter—significant restructuring set aside in cash, not just rhetoric. HCLTech has confirmed a workforce restructuring exercise, mainly overseas, but has refrained from publishing precise numbers.
These are not isolated episodes but symptomatic of a larger churn. Infosys, for example, has carefully avoided the mass-layoff label, with headcount ticking slightly upward to over 323,000 by June and a commitment to hire around twenty thousand fresh graduates in the current financial year. The point is not to downplay the pain—each departure carries a human cost—but to distinguish between a sector in collapse and a sector in transition.
Diagnosing the Causes
Overcapacity meeting cautious clients. The pandemic years saw hiring outpace sustainable demand. As global clients tightened discretionary technology spending and stretched their decision cycles, benches swelled and margins came under pressure. Rationalisation was inevitable.
AI as an accelerant, not an arsonist. Generative AI has not “destroyed” Indian IT jobs, but it has accelerated the automation of tasks that were ripe for it: first-line support, manual testing, documentation-heavy roles. At the same time, it has generated demand for new skills in AI-augmented delivery, data engineering, cyber resilience, and platform design. The tension is not between employment and unemployment, but between old competencies and new ones.
The pyramid reset. Clients increasingly demand outcomes, not man-hours. The traditional pyramid of multiple juniors supporting layers of managers is flattening, with more emphasis on versatile professionals who can both design and execute. The “frozen middle” is the most exposed—unless it can be retrained and redeployed into hands-on roles.
Visa shocks. The sudden imposition of a $100,000 fee on each new H-1B petition in the United States in late September has sharpened the cost of onsite staffing. This does not end the model but does force a pivot: more delivery from India, more near-shoring, and more selective local hiring abroad.
What Companies Owe Their People
The moral dimension of layoffs often gets lost in financial reporting. Accenture, at least, has matched words with numbers by provisioning hundreds of millions of dollars for severance and redeployment. TCS’s reliance on a thirty-five-day bench cap makes for more ambiguous exits: employees can find themselves out the door not because of misconduct or underperformance, but because their redeployment did not materialise fast enough.
Whatever the method, the imperative is clear: employees deserve clarity, fairness, and continuity. Severance cheques matter, but so do extended insurance, career counselling, transparent redeployment criteria, and real outplacement support. Most importantly, companies need to make reskilling an on-ramp to actual projects, not a cul-de-sac of endless online modules. Trust, once lost, cannot be regained cheaply.
Remedies That Reduce Pain and Raise Growth
Bench-to-billable academies. Internal academies should provide eight to twelve weeks of paid reskilling into priority areas—AI operations, cloud optimisation, cybersecurity—and guarantee a berth on a live project at graduation. Leaders must be judged on conversion rates from bench to billable roles.
Skills-first internal marketplaces. Move from titles and tenure to demonstrable skills—badges, code samples, live project outcomes. Make it easier for talent to move across accounts and geographies, and reward managers who release rather than hoard people.
Client-funded learning. Training should be built into contracts. Embedding co-funded reskilling hours into large renewals protects continuity for clients and redeployment for providers. Learning then ceases to be a cost centre and becomes a deliverable.
Flattened pyramids and versatile roles. Promotions must reflect impact, not span of control. The winners will be those who convert managers into architects, and analysts into product-ops specialists. The losers will be those who treat the mid-career layer as expendable ballast.
Sharing the productivity dividend. Firms must standardise AI tools and guardrails so that productivity gains are real and auditable. A portion should flow back to clients through outcome pricing; another portion must be reserved for funding continuous upskilling. When employees see a link between efficiency and career growth, adoption becomes enthusiastic.
Visa risk hedging. The H-1B shock is a reminder to diversify. Firms must blend local hiring in the US and Europe for domain-intensive roles with India-first and near-shore delivery for scale. The aim is not to abandon mobility but to deploy it more strategically.
Mid-career fast tracks. Programmes must be designed to redeploy mid-career staff into new, revenue-linked roles. The frozen middle can either be an anchor or an engine. The choice is in how it is trained and trusted.
Tier-2 and Tier-3 apprenticeships. Paid apprenticeship pipelines linked to delivery centres in smaller cities widen the funnel, reduce costs, and root growth more sustainably than a narrow focus on metros.
Fresh Recruitment: Tight but Targeted
Even amid these layoffs, hiring has not dried up. TCS is still bringing in fresh talent where demand justifies it. Infosys has doubled down on campus hiring for FY26 and expanded physical capacity in Punjab. Accenture, while booking hefty severance costs, continues to hire into AI and digital capabilities. Cognizant is investing in long-term expansion, including a new campus in Vizag that promises thousands of jobs over the decade.
The message is clear: the industry is not retreating, but refocusing. Entry-level intake remains robust, but its direction has changed. It now demands fluency in AI-assisted workflows, secure coding, and data literacy—skills that will define the next growth wave.
A Higher Trajectory—If We Choose It
Each plateau in the history of Indian IT has felt like a precipice. After Y2K, during the global financial crisis, at the dawn of cloud computing—the obituary was drafted too soon. Today’s layoff cycle belongs in that lineage: an uncomfortable but necessary regeneration.
The numbers—twelve thousand roles at TCS, over eleven thousand at Accenture, restructuring elsewhere—show the pain is real. But they also show it is purposeful, bounded, and accompanied by new hiring in adjacent domains. The true story is one of shedding outdated skins to reveal a leaner, more resilient body underneath.
If leaders embed redeployment into the fabric of business, if employees embrace reskilling as craft, and if contracts hardwire learning into delivery, India’s IT sector will not only recover but lead. This is not a sunset; it is a sunrise hidden behind cloud cover. The layoffs, painful as they are, can be remembered not as the beginning of decline but as the spark of renewal—the moment when Indian IT climbed to a higher trajectory rather than languishing on a plateau of diminishing returns.