Indian IT Denies AI Layoffs; Big Tech Calls It Out
The global technology landscape is undergoing a profound transformation, with Artificial Intelligence at its epicenter, yet the narrative surrounding its impact on employment varies strikingly between regions. While major Western tech companies are openly attributing significant workforce reductions to an aggressive pivot towards AI, their Indian counterparts appear to be navigating a more cautious, often understated, path. This divergence in transparency highlights not just differing corporate communication strategies, but also the unique pressures and realities faced by each sector.
Tata Consultancy Services (TCS), India’s largest IT services firm, recently announced plans to lay off approximately 12,000 employees, representing about two percent of its global workforce, phased through fiscal year 2026. While speculation quickly linked these cuts to AI’s growing capabilities, TCS CEO K. Krithivasan has publicly attributed the decision to “skill mismatch” and a necessary “organizational shift” from traditional waterfall models to more agile, future-ready operations. Despite the company’s efforts to upskill over half a million employees in basic and advanced AI, the underlying message points to a strategic recalibration of the workforce to meet the demands of an increasingly AI-centric future, where conventional roles may no longer fit. Industry analysts, however, often interpret such moves as a broader cost-cutting exercise aimed at improving operating margins amidst a weak demand environment and macroeconomic uncertainties, rather than solely a direct outcome of AI displacement.
In stark contrast, global giants like Microsoft are making no secret of AI’s role in their workforce restructuring. The Redmond-headquartered company has laid off over 15,000 employees in 2025 through multiple rounds, openly framing these reductions as part of a strategic realignment to position the company for an “AI-driven future.” CEO Satya Nadella has acknowledged the “incongruence” between strong financial results and job cuts, emphasizing massive investments in AI infrastructure, amounting to $80 billion, as a core driver for this transformation. A former Microsoft employee even noted a significant cultural shift within the company once “AI became monetised,” leading to a focus on performance metrics and AI tool adoption. This transparent approach from Big Tech suggests redundancy is the price of rapid, uncompromising innovation.
The broader industry trends underscore the unavoidable reality of AI’s impact on jobs. The World Economic Forum’s 2025 Future of Jobs report predicts that while AI will displace 85 million jobs globally, it will also create 97 million new ones, leading to a net growth in employment. However, this “net growth” masks significant structural shifts. Routine and repetitive roles, from customer service agents to data entry operators and junior audit staff, are increasingly vulnerable to automation. For India, a significant 38% of existing core skills are expected to change, compressing the traditional job pyramid that was once wide at the base with repetitive roles. Mid-career professionals, especially those with 15-25 years of experience in now-redundant functions, face particular risks due to outdated skillsets.
The imperative for reskilling and upskilling has never been more critical. While Indian IT firms like TCS, Infosys, and Wipro have launched massive training programs in AI and other digital skills, the effectiveness of self-learning models and the sheer scale of the challenge remain a concern. Experts warn that unless training programs combine role-specific learning with project-based, hands-on skilling, they may not be effective enough to prevent job cuts. The Economic Survey 2024-25 has urged Indian policymakers to address AI’s impact on labor markets, particularly in a services-led, labor-surplus economy where low-value-added services jobs are most vulnerable.
Ultimately, the differing public stances on AI-driven layoffs reflect a complex interplay of market perceptions, investor expectations, and internal strategic objectives. While Big Tech embraces the “AI transformation” narrative as a sign of aggressive future-proofing, Indian IT appears to be navigating this shift with more caution, perhaps to mitigate talent retention challenges or avoid public anxiety. Regardless of the messaging, the underlying reality is consistent: AI is fundamentally reshaping the workforce, demanding a proactive and collaborative effort from companies, employees, and governments to foster continuous learning and adapt to an intelligent-driven future.