Downsizing spree in India's IT sector

India's IT companies are on a downsizing spree in the wake of falling profits and the potential of Artificial Intelligence. Thousands of employees in the country's IT sector are under threat of mass layoffs. Tata Consultancy Services (TCS) laid off about 15,000 employees in the last six months of 2025. IT experts say that the company will continue the same pattern in the new year. TCS's net profit fell by 13.9 per cent to Rs 1,657 crore in the third quarter of the current financial year.

All the leading IT companies in the country are facing a decline in profits. This is mainly due to the economic uncertainty in the US and Europe. Along with this, the decision to restructure the company with the advent of artificial intelligence also led to a reduction in the workforce. As part of utilising the potential of AI, most companies are spending extra money, which has also led to a decline in their profits. With the stricter law requiring mandatory office attendance for five days a week, a small percentage of employees have voluntarily 'called it a day'. As more companies emulate the TCS pattern, there is ambiguity looming in the country’s IT sector.

The country's second-largest IT company, Infosys, also reported a 2.2 per cent decline in net profit to Rs 6,654 crore during the review period. However, Infosys' revenue grew by 8.9 per cent to Rs 45,479 crore during the period, which is expected to help the company retain more employees. The slowdown in the IT sector, the most relied upon by the country's engineering graduates, shows that the career option will dwindle in the coming years. At the same time, job opportunities are increasing, albeit at a small scale, in areas that require more technical knowledge, including AI.

It would be wise if youngsters develop an interest in exploring such options and pursue those courses. The slowdown in the IT sector is likely to continue as the dollar continues to fluctuate against major currencies of the world. US President Trump's tariff war has caused economic uncertainty in the US and around the world, affecting IT companies as well as other export companies.