Startup Originals Team
A wave of change is sweeping through India’s IT landscape as Tata Consultancy Services (TCS), the country’s largest IT services provider, announces plans to lay off around 12,000 employees in 2025. This major workforce reduction, targeting mostly mid- and senior-level staff, signals more than just a corporate restructuring-it’s a clear sign that the traditional way of running Indian IT companies is coming to an end.
The End of the “Sholay Era”: CP Gurnani’s Perspective
CP Gurnani, former CEO of Tech Mahindra and a respected voice in the Indian tech world, weighed in on the development using a memorable reference from the classic Bollywood film Sholay. “The focus on the Sholay dialogue ‘Kitne aadmi the’ (how many men were there)-or judging the Indian IT industry based on headcount-that period will be over,” said Gurnani. He shared that IT companies must stop measuring success by employee numbers and instead embrace outcome- and output-based business models. This, he argues, is essential for staying relevant in a world now driven by artificial intelligence (AI) and rapid technology change.
Why Is TCS Laying Off 12,000 Employees?
TCS revealed that the layoffs, equaling roughly 2% of its global workforce, are part of a plan to build a “future-ready” organization. Several factors are driving this restructuring:
- Skill Mismatch & Evolving Needs: Despite retraining over 550,000 employees in basic tech skills and more than 100,000 in advanced areas like AI, TCS says some roles no longer fit the company’s evolving business needs.
- AI and Automation: While not the only cause, the growing adoption of AI and automation tools means fewer routine jobs and a greater focus on specialized skills such as AI engineering and data science.
- Client Demand Delays: Recent months have seen delays in client decision-making and project starts, pushing IT firms to become leaner and more agile.
- Broader Industry Trend: The top six Indian IT companies have seen hiring dip sharply, with the sector transitioning focus from bulk hiring to technological and productivity upgrades.
Impact and Reactions:
TCS is providing severance packages and outplacement assistance to affected employees, and insists that these changes will not impact service delivery to its clients. However, the move has caused widespread concern within the IT industry and among employee unions, who warn of the psychological and financial toll on thousands of workers.
CP Gurnani, now leading AI startup AIonOS, believes that the layoffs highlight the need for the Indian IT sector to reimagine itself. He points out that advancements in AI will create new opportunities—jobs for AI engineers, data scientists, and specialists in automation-while routine roles may disappear. This marks a shift to organizations that are more data-centric, efficient, and client-focused.
The Future Model: Outcome Over Headcount
Industry experts, including CP Gurnani and leaders from other tech giants, agree that the future of IT lies not in having the largest workforce, but in delivering measurable outcomes and value. This transition requires companies to:
- Invest in AI, automation, and emerging technologies.
- Focus on productivity and specialized skills.
- Move toward pricing and service models based on outcomes rather than billable hours or headcount.
Conclusion:
The recent layoffs at TCS represent a watershed moment for Indian IT. The old era – where size was everything-is giving way to one where efficiency, innovation, and outcomes rule. As India’s tech industry navigates this transformation, companies, employees, and clients alike must prepare for a rapidly changing future-one where quality and creativity take priority over pure numbers.
