“TCS layoffs are just the beginning, many companies will be hit by AI”
With the announcement of layoffs of more than 12,000 employees in the country’s largest IT company Tata Consultancy Services (TCS), experts are fearing more such cases in the future due to the increasing influence of AI and automation. TCS has announced layoffs of more than 12,000 employees, i.e. 2 percent of the total number of 6.13 lakh employees. This move is expected to have the greatest impact on mid and senior level employees. TCS has described these layoffs as part of its strategy to become a ‘future-ready organization’ in which emphasis is being laid on technology, adoption of AI and restructuring of the workforce.
IT companies are now moving towards a more efficient workforce model
According to a PTI report, Tarun Pathak, Research Director, Counterpoint Research, says that TCS’s move is a result of macroeconomic pressures, changing customer expectations and the industry’s shift towards a more agile, outcome-based model. He said that even though TCS has not described this layoff as AI-induced, it is happening at a time when the adoption of automation and AI is having a major impact on workforce decisions across the tech industry. Pathak said, “Indian IT companies are now moving towards a more efficient and performance-focused workforce model.”
Cost pressure will force further layoffs
Faisal Kawoosa, founder and chief analyst of TechArc, said that enterprises are now expecting IT service companies to do more with less using AI. Kawoosa said, “In such a situation, cost pressure will force further layoffs. We should see this as a part of a larger evolution of AI-driven IT where AI agents will increasingly replace human agents.”
Concerns of IT sector employees increased
TeamLease Digital CEO Neeti Sharma said that every company is now looking at AI-led transformation. She said that companies are investing heavily in increasing the skills of their existing and new employees. However, she said that employees who do not fit into the future structure of the company or do not increase their capabilities may have to leave. This decision of TCS has increased the concerns of IT sector employees and it is also being seen as a widespread debate on social media. Some users called the fear of job loss due to AI and automation a ‘reality’, while some people also expressed the fear of increased competition and reduction in salaries.
