You’ve probably heard the rumblings. India’s largest IT services company, Tata Consultancy Services (TCS), recently dropped a bombshell: a plan to reduce its global workforce by about 2%, impacting over 12,000 employees. This isn't just another corporate restructuring; it's a seismic event that has sent shockwaves through the entire Indian IT landscape and sparked a crucial conversation about the industry's future.
Key Highlights
- ✓ TCS announced plans to lay off 12,000 employees, roughly 2% of its global workforce.
- ✓ Former Tech Mahindra CEO CP Gurnani urged the industry to move beyond its "headcount obsession."
- ✓ Former Nasscom chairman Ganesh Natarajan labeled the traditional IT delivery model as "Jurassic Park material."
- ✓ The layoffs primarily target mid- and senior-level employees, citing skill mismatches rather than AI productivity gains.
- ✓ The news comes as other giants like Infosys and Wipro also report significant drops in their workforce numbers.
A Sholay Quote and a Wake-Up Call
In the midst of the chatter and concern, one voice cut through the noise with a surprising and powerful message. CP Gurnani, the former CEO of Tech Mahindra, didn’t mince words. Speaking to CNBC-TV18, he invoked one of the most iconic lines from the classic Bollywood film Sholay: "Kitney aadmi the?" which translates to "How many men were there?".
He followed it up with a sigh of relief, stating, "Thank God that period will be over." His point was crystal clear. For decades, the Indian IT industry's strength was measured in one simple metric: headcount. The bigger the workforce, the more powerful the company. Gurnani is arguing that this era of measuring success by sheer numbers is, and should be, coming to an end.
He’s urging the entire sector to shift its focus from this obsession with headcount to what really matters now: outcome-based models. It’s no longer about how many people you have on a project, but what they can achieve. He’s pushing for a future built on enhanced productivity, deep specialized skills, and advanced technological capabilities.
The Crumbling Pyramid
For years, the Indian IT sector has been built on what's known as the pyramid model. Think of a massive base of entry-level engineers fresh out of college, handling the bulk of the work, with fewer experienced managers and specialists at the top. This model worked wonders when the primary advantage was wage arbitrage and a massive talent pool.
However, the world is changing. Global clients are now demanding more complex, niche, and AI-driven solutions. The emphasis has dramatically shifted from quantity to quality. Gurnani’s message is a direct challenge to this long-standing pyramid structure, suggesting it’s no longer fit for purpose in this new environment.
Is AI the Real Culprit?
Naturally, whenever you hear about tech layoffs these days, the first suspect is always Artificial Intelligence. But here's where the story gets a bit more nuanced. TCS, for its part, insists that these job cuts are not directly driven by productive gains from AI. Instead, CEO K Krithivasan points to skill mismatches and the need to realign their talent with emerging business demands.
The company says the layoffs will primarily affect mid- and senior-level employees whose roles cannot be easily restructured to fit future needs. While reskilling and redeployment programs are in place, some associates will inevitably be let go. This is part of a broader transformation strategy to adapt to technologies like AI and expand into new markets.
However, experts suggest that AI and automation are undeniably reshaping the landscape. Roles that were once the bread and butter of the industry, like low-level coding, testing, and documentation, are increasingly becoming obsolete. Analysts also point out that vendor consolidation and market share shifts are contributing factors, meaning it’s not just about automation. The most vulnerable roles? Entry-level BPO and customer service positions.
A Sector in Transition
The challenges aren't limited to TCS. The entire sector is feeling the pressure. In the past two years, Infosys has seen its headcount decline by over 12,000, while Wipro has seen a drop of more than 25,000. HCLTech has also announced restructuring due to location and skill mismatches. The post-pandemic hiring boom, which saw the top five IT firms expand from 11.5 lakh employees in March 2020 to 15.34 lakh by December 2024, is clearly over.
This raises a critical question: if the old model of relying on a huge workforce and wage arbitrage is failing, where does India's competitive advantage lie? A concerning factor is the relatively low investment in research and development. In 2024-25, TCS's R&D expenditure was around 1% of its turnover, while Infosys's was just 0.62% of its revenue in 2025. Without significant investment in innovation, moving up the value chain will be a tough climb.
The Individual Mandate: Outwork the System
Amidst all this high-level industry talk, what does it mean for the individual tech professional? Soham Parekh, a techie who famously made headlines for allegedly "moonlighting" across multiple startups, offered some blunt advice. Reacting to the TCS news, he urged tech workers to take matters into their own hands.
"Don't wait for handouts. Learn fast. Build harder. Your skills are your leverage," he said. "Outwork the system. Outlearn the gatekeepers. Outbuild the giants." While Parekh’s own history is complicated—he was accused of scamming employers but also praised as an "excellent developer"—his message resonates with the current climate. The era of job security through loyalty to a single company is fading fast.
The bottom line is that the responsibility is shifting to the individual. The message from industry leaders and the market itself is clear: continuous upskilling and reskilling are no longer optional. They are essential for survival and growth. Embracing new technologies and building a unique, high-demand skill set is the only way to stay relevant.
Conclusion
The TCS layoffs are more than just a headline; they are a clear sign that the Indian IT industry is at a major inflection point. The old playbook, built on a pyramid of massive headcounts and wage arbitrage, is being torn up. As industry veterans like CP Gurnani have boldly stated, the future is not about "how many" but "how capable."
This shift, driven by the rise of AI, changing client demands, and global economic uncertainties, is forcing a fundamental reinvention. It's a challenging time, but also one of immense opportunity for those willing to adapt. The focus is now squarely on specialized skills, higher productivity, and a relentless commitment to learning. The "Jurassic Park" model is on its way out, making way for a smarter, more agile, and outcome-driven tech ecosystem.
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