AI Shockwave: How TCS Layoffs Signal a Crisis for Indian IT Jobs

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5 Key Takeaways

• TCS's decision to lay off 12,000 employees signals a major shift as AI tools like ChatGPT and Claude are making many IT jobs redundant.
• Indian IT giants have relied on low-cost labor and arbitrage rather than investing in innovation, R&D, or building original products.
• The rise of AI is set to disrupt knowledge work and the service industry in India, leading to significant job losses and economic pain.
• Unlike China, which transitioned from manufacturing for others to creating its own global products, Indian IT firms failed to move up the value chain.
• The lack of vision and risk-taking by Indian IT companies has left them vulnerable, and many more layoffs are expected as AI capabilities rapidly advance.

TCS Layoffs: What They Really Mean for Indian IT and Our Jobs
If you’ve been following the news, you probably heard that TCS, India’s biggest IT company, is letting go of 12,000 employees. While the company hasn’t directly blamed artificial intelligence (AI) for these layoffs, it’s clear that new AI tools like ChatGPT, Claude, and Gemini are changing the game. These tools can now do much of the routine work that thousands of Indian IT professionals have been doing for years.
For decades, India’s IT industry has thrived because we had a huge pool of English-speaking coders willing to work long hours for much less pay than their Western counterparts. Our companies, like TCS, Infosys, Wipro, and HCL, made billions by handling the “boring” but necessary tech work for global giants. We were, in a way, the human version of AI—following instructions, fixing bugs, and maintaining code.
But now, real AI is here, and it’s even cheaper and more efficient than hiring people. Just as machines replaced manual laborers during the Industrial Revolution, AI is now replacing “knowledge workers”—the very people who made India’s IT boom possible. This doesn’t mean all IT jobs will disappear overnight, but the ride ahead will be rough, especially for those doing repetitive tasks.
The sad part is, Indian IT giants saw this coming but didn’t do much to prepare. Instead of using their profits to build new products or invest in research, they stuck to the same old business model—hiring cheap labor and billing clients. Meanwhile, countries like China used their manufacturing boom to create their own brands and products. Today, China has companies like BYD and Oppo, but India still doesn’t have a homegrown operating system, chat app, or even a popular video game.
Now, with AI advancing rapidly (ChatGPT 5 is just around the corner and is rumored to be even better at coding), the kind of work that once needed thousands of people can be done by a handful of experts with the help of AI. Companies like Nvidia, worth trillions, have just 26,000 employees—compare that to TCS’s 600,000.
In the next few years, many IT jobs in India will be at risk unless our companies start innovating and moving beyond just “servicing” others. The government may try to soften the blow, but the reality is clear: the Indian IT industry needs to reinvent itself, or more pain is on the way.

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