India’s IT Sector Undergoing A Structural Shake-Up as AI Rewrites the Rules
Thousands of Indian tech employees are losing jobs. The names are familiar—TCS, Infosys, Wipro—as well as global giants like Accenture, Oracle, and IBM. These layoffs aren’t just cost cuts; they signal something deeper: a reinvention of the industry itself. The New Indian Express
Rebuilding for “Future-Readiness”
Firms are retooling for AI, cloud services, and product-centred work. But this metamorphosis comes with pain. What was once a promise of endless growth now meets the harsh terrain of volatility, automation, and shifting client expectations. The New Indian Express
- TCS trimmed ~12,000 roles (~2% of its workforce) in a restructuring bid to become more agile. The New Indian Express
- Infosys laid off 25,994 employees in FY24 for “workforce optimization amid volatile demand.” The New Indian Express
- Wipro — 24,516 roles gone, tied to improving cost efficiency and productivity. The New Indian Express
- Tech Mahindra, Oracle India, HCLTech, Cognizant, IBM India—each has peeled away thousands of roles, whether due to divestitures, portfolio rebalance, or accelerating the shift to AI and cloud. The New Indian Express
What’s Driving This Disruption
It’s not just about new tech. There are multiple overlapping forces at work:
- Demand cooled after the hiring frenzy of 2021–22. Clients are pulling back or postponing projects. The New Indian Express
- Automation & AI are replacing repetitive, routine tasks. Roles that once needed human oversight are now being streamlined. The New Indian Express
- Shift in client expectations: from labour-intensive outsourcing to outcome-based models. Deliverables, not just hours, are becoming what matters. The New Indian Express
- Emerging competition from low-cost geographies: Vietnam, Philippines, parts of Africa are taking over simpler services. India’s cost advantage in those areas is eroding. The New Indian Express
- Skills mismatch: many workers don’t yet have cloud, AI, or data skills. As firms demand more of these, mid-level and routine job categories are vulnerable. The New Indian Express
The Exports Picture & Economic Role
Despite the upheaval, India’s IT/ITeS export footprint remains large, and growing:
- In 2023-24, exports were ~USD 199 billion — about 25.6% of India’s total exports (USD 778.2 billion). The New Indian Express
- Projections for 2024-25 aim for ~USD 224 billion — about 27% of the total (USD 824.9 billion). The New Indian Express
So the sector is not collapsing; it is shifting. It still underpins a large slice of the export economy. The New Indian Express
The Road Ahead: Risks & Opportunities
This is a turning point.
- Mid-level and routine jobs risk disappearing unless there’s large-scale reskilling. Unions and labour economists warn of hundreds of thousands of roles being threatened. The New Indian Express
- However, new roles are emerging: AI architects, cloud engineers, product designers. These are not just “tech jobs” but roles demanding creative, strategic, domain-specific skills. The New Indian Express
- India still holds strengths: a mature delivery ecosystem, large talent pools, English proficiency, and global capability centers. For complex engineering and high-value work, India remains competitive. The New Indian Express
Conclusion: Restructuring, Not Retreat
India’s IT sector is not shrinking simply because of AI—it is reshaping. Some jobs will vanish. Others will transform. And many new opportunities await those who adapt. Firms are making hard choices, yes—but these may define who wins in the next decade: those who cling to old models, or those who embrace the uncertainty and build forward.
