India's IT Sector Sees Silent Layoffs Amid Restructuring

The latest trend reflects a new phase in the restructuring of India's IT services industry, which is valued at over $315 billion. (AI image)

Silent layoffs and job cuts are becoming the new norm in India’s technology and software services industry. As a result, as many as 35,000 jobs could be cut during the current calendar year as companies increasingly prioritise productivity improvements in an intensely competitive environment. The latest trend reflects a new phase in the restructuring of India's IT services industry, which is valued at over $315 billion. Companies are continuing to rationalise the workforce built up during the pandemic hiring surge after grappling with weaker business conditions over the past three years.

Several thousand job cuts in IT

Staffing firm TeamLease estimates that between 10,000 and 15,000 technology professionals have already lost their jobs through so-called silent layoffs by May and projects total job losses of 25,000-35,000 for the full year, according to an ET report. CIEL HR Services estimated that around 12,000 jobs have been eliminated so far in 2026 and expects the year's total layoffs to reach between 18,000 and 21,000. If realised, cumulative job losses across 2025 and 2026 could rise to as much as 43,000. For example, unlike last year, when Tata Consultancy Services (TCS) and global technology major Accenture publicly announced more than 23,000 job cuts worldwide, the current round is largely taking place through silent exits linked to performance reviews and skill relevance, without formal layoff announcements, the report said. According to TeamLease, while 2025 was primarily about correcting excessive hiring during the pandemic, 2026 is centred on reshaping workforce structures.

How current layoffs differ

The firm said the current cycle differs from earlier downturns because job reductions are being driven less by slowing demand and more by productivity gains from artificial intelligence, widening skill gaps and efforts to simplify organisational structures. Although hiring recovered modestly in FY26 following around 69,000 job cuts in FY24, companies continued to remain cautious and reduced headcount in selected functions. TeamLease said the broad-based correction has largely run its course, with future workforce reductions expected to be more targeted. Instead of large-scale layoffs, companies are now focusing on eliminating redundant positions, overlapping responsibilities and excessive management layers. This shift is reflected in the combined net reduction of 7,389 employees across the five largest Indian IT companies—TCS, Infosys, HCLTech, Wipro and Tech Mahindra—in FY26, reversing the net addition of 12,718 employees recorded in FY25. During the year, TCS reduced its workforce by 23,460 employees, while Bengaluru-based Infosys added about 5,000 people. Industry executives said companies across the technology sector—including IT services firms, global capability centres (GCCs) and startups—are restructuring their organisations by streamlining operations, eliminating overlapping roles and accelerating the adoption of automation. According to CIEL HR, around 22,000 jobs were cut across IT services, startups, visual effects (VFX), media operations and technology-led restructuring during calendar year 2025. So far this year, workforce reductions of about 12,000 have been driven largely by major technology companies and restructuring initiatives within GCCs. "The workforce reductions we are seeing are mainly due to companies reshaping how they operate," said Aditya Narayan Mishra, managing director and chief executive at CIEL HR. Mishra said the current trend should be viewed as a workforce realignment rather than a broad-based decline in employment. "While layoffs continue to make headlines, they represent one part of a broader workforce transition," he said. He noted that even as companies are reducing headcount in certain areas, they are continuing to recruit for "critical, future-ready roles." Neeti Sharma, Chief Executive Officer of TeamLease Digital, said hiring demand is increasingly being concentrated in specialised areas such as artificial intelligence, cloud computing, cybersecurity, platform engineering and engineering roles within GCCs. At the same time, functions that are routine and highly susceptible to automation continue to face mounting pressure. Satish Viswanathan, former Managing Director at Accenture, said the ongoing transformation reflects a deeper structural shift rather than merely the impact of new technologies. "The AI era is breaking the old workforce equation in IT and consulting,” he said. “This does not mean people are irrelevant; it means that the basis of workforce value is being redefined," he said, adding that companies are increasingly moving away from strategies centred on "labour scale" and towards those built around “cognitive leverage”.