The Great Reset: How IT Layoffs Are Reshaping India’s Tech Future

The numbers are stark and sobering. So far in 2025, there have been 413 layoffs at tech companies with 96,861 people impacted globally, with India bearing a significant portion of these cuts. Oracle Corporation has laid off around 10% of its employees in India, leaving several skilled professionals jobless overnight, while TCS is reportedly cutting 12,000 jobs, primarily impacting mid-level and senior management positions. Technology that once seemed invincible is now facing a crisis, with changes at its core that surpass the regular economic cycles.

The layoffs currently happening in the tech sector are not simply the typical way the industry declines. These changes prompt us to rethink the entire concept of the Indian IT sector and its implications for the world economy.

The Perfect Storm

There are multiple forces that have come together to produce this difficult atmosphere in 2025. Decreasing global demand is the main reason, among others, and the analysts are keeping an eye on the effect that AI might have on the changing of positions in a sector, which has been going on for a long time, and is regarded as the main source of India’s economic growth. Additional pressures include cost-cutting measures, a reduction in IT budgets, uncertainties over the global economy, and strong adoption of AI automation. The pandemic-era hiring spree, when companies added workers at breakneck speed to meet surging digital demand, has given way to a harsh reality check.

Companies are no longer just cutting costs; they’re fundamentally rethinking their workforce needs. Oracle has officially termed their recent cuts as part of “restructuring,” but industry experts are linking it to broader shifts, including policy changes and reduced reliance on H-1B visas. TCS’s approach of targeting mid-level and senior management positions while requiring junior employees to secure new projects within 35 days reflects this new reality. The old-fashioned way, large teams would perform routine coding, testing, and maintenance without any interruption, is now under reconsideration as the automation tools are becoming more and more capable. This change is most prominent in the Indian IT services sector, which had depended on the delivery of excellent work at competitive prices through the large number of skilled professionals for its fame.

However, this is not just a simple story. The headlines are only focusing on job losses, but a radical change is already happening a bit differently that could turn over the whole industry landscape.

AI Drives New Wave of Layoffs and Opportunities

Artificial intelligence is the mainstay of this change, acting as both disruptor and enabler. Even though AI won’t take over all the IT positions, several support and service teams will be facing a decrease in the number of work‑related tasks. Companies are already feeling the changes in software testing, coding, and technical support.

Still, the connection between AI and jobs is not just a story of replacements. The extent of talent needed by the industry will be more toward people with human intelligence, the ability to solve complex problems, be creative, and at the same time possess technical skills to train machines. As a result, the shift is not in the disappearance of jobs but in the change of their nature.

Think of the standard career path in Indian IT: newly graduated employees would be first assigned to check the routine of tasks and then, step by step, entrusted with more complicated work. AI is shortening this progression, getting rid of many entry-level positions and creating a demand for better-skilled people. As a result, there are both opportunities and challenges.

Skills that can protect you from layoffs

Across the tech spectrum, the signs are clear for the professionals: the traditional skill sets that in the past have been a guarantee of job security are no longer enough. What companies want are employees who can work with AI tools, not against them. So, this entails knowing how to prompt AI systems effectively, deciding correctly that automation is to be relied upon while human judgment is to be used, and being creative to solve the problems, specifically in the given context.

Future IT professionals should concentrate on reskilling in those areas that necessitate human intervention, such as AI development, software engineering, and IT systems’ problem-solving. Those who will be on top in this new scenario are the ones who will be able to merge technical capability with business value.

Hard skills such as data science, machine learning engineering, cybersecurity, and cloud architecture are still sizzling hot and demand for them soars. But it is not just about technical skills. The newly emerged most wanted skills are understanding business contexts, communicating with non-technical stakeholders, and thinking strategically about technology implementation.

Beyond The Headlines

While job cuts dominate the news, a quieter story is unfolding. Many companies are simultaneously hiring in specific areas while reducing headcount in others. This isn’t just about cost-cutting; it’s about repositioning for the future. Companies are moving away from the traditional outsourcing model toward more specialised, high-value services.

Indian IT companies are investing heavily in AI capabilities, not just to automate their existing services but to offer entirely new types of solutions. This transition period is painful, but it’s also necessary for long-term competitiveness.

The geographic spread of layoffs also tells an interesting story. Oracle’s recent cuts affected employees across Bengaluru, Hyderabad, Chennai, Mumbai, Pune, Noida, and Kolkata, while TCS has implemented policies requiring unassigned staff across offices in Hyderabad, Pune, Chennai, and Kolkata to find projects within 35 days or face termination. No tech hub is immune to these changes. However, these same cities are also seeing new investments in AI research and development, suggesting a complex rebalancing rather than a simple decline.

What the latest layoffs mean for the future of Indian IT

The current layoffs rounds, although distressing, denote a necessary correction of the past pattern rather than a step-down trend. Instead of closing in, the Indian IT sector is changing its form to better suit the market situation. Those corporations that will be able to manage this change well will come out of it stronger and with a higher ranking on the competition board. As for the ones that won’t be able to, they might find it hard to keep up with the market and remain relevant.

On the other hand, workers should not expect a smooth ride through such rough times and are advised to be mentally prepared for any unforeseen circumstances. At the same time, the period also wants them to be quite proactive and upgrade their skills. The future belongs to the workers who can use AI tools efficiently.

The next few years will determine which companies, workers, and regions can meet with success in the new reality. This change has already been established, and it is impossible to go back to the old setup. The question is not if change will take place, but who will be prepared for it when it does.

The tech industry of India has managed to reinvent its identity in the past, and it will again. But the changes this time are much bigger than the ones that had occurred before. Success will require not only new skills but also new ways of thinking about technology, jobs, and value creation.