Inflection point for IT

TCS layoffs show being large is no longer enough in an AI-dominated world; it's all about efficiency, innovation

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ATA CONSULTANCY SERVICES' (TCS) decision to lay off 2% or about 12,000 of its global workforce is a clear signal of where the domestic information technology (IT) industry now stands. It's the first open admission by a major player that the traditional model that drove decades of growth is no longer working. While TCS may be the first to act, it's unlikely to be the last. Other companies will certainly follow as the moment of reckoning for domestic IT firms has arrived.

The most striking part of this development is that the cuts are concentrated not at the entry level, which has long been seen as most at risk from artificial intelligence (AI), but at the middle and senior levels. TCS has said the layoffs are not because of AI, but due to a skill mismatch. Still, it's clear that AI and automation are playing a major role in reshaping how companies think about roles, structures, and future workforce needs.