Quick Take
- India’s IT sector may see 35,000 IT job cuts in 2025, staffing firm TeamLease estimates.
- CIEL HR pegs 2025 cuts at 12,000 so far, rising toward 21,000 by year-end.
- AI-led productivity gains, not a demand slump, now drive most redundant and management-layer exits.
In This Article
India’s technology and software services sector is likely to see up to 35,000 IT job cuts this year, staffing firm TeamLease estimates, as companies chase productivity gains through automation rather than growth. The full-year toll may land between 25,000 and 35,000 roles. Rival estimator CIEL HR Services counts about 12,000 cuts so far in 2025, with the number potentially ending between 18,000 and 21,000 by December.
These IT job cuts mark a change in how the $315 Bn (Rs 30,10,000 Cr) IT sector operates. It is winding-down the surplus staff it built during the pandemic-era hiring boom, followed by a business slowdown over the past three years. Unlike last year, when Tata Consultancy Services (TCS) and Accenture announced large formal layoffs, the current wave is quieter, targeting redundant roles, duplicated functions, and bloated management layers.
StartupFeed Insight
The number that matters is not the headline 35,000, it is the shape of the cut. Middle-management and duplicated functions are going first, which tells you this is a margin play, not a survival move. Every displaced mid-level manager frees budget for two or three AI-skilled specialists, so the sector is trading headcount for capability, not shrinking outright. Watch fresher hiring: TCS has already flagged about 25,000 fresher hires for FY27, down from the old 40,000 range. StartupFeed expects the top five firms to report another net headcount decline in H1 FY27 results by October 2026, even as GCC and AI roles keep rising. By Avinash.
IT Job Cuts by the Numbers
The 2025 IT job cuts in India fall in a band of 25,000 to 35,000 roles, according to TeamLease. Two staffing firms track the figure using different methods, which is why the ranges differ. The table below sets out the key estimates.
| Metric | Detail | Notes |
|---|---|---|
| TeamLease 2025 estimate | 25,000 to 35,000 roles | Full-year projection for the sector |
| CIEL HR 2025 (so far) | About 12,000 roles | Could reach 18,000 to 21,000 by year-end |
| Combined 2025-2026 estimate | As much as 43,000 roles | TeamLease cumulative view |
| Top five firms, FY26 net | 7,389 headcount decline | Reverses 12,718 additions in FY25 |
| TCS FY26 reduction | 23,460 employees | Largest single-company cut |
| Main driver | AI and role simplification | Not a demand collapse |
The most striking detail is the gap between the two firms on these IT job cuts. Both agree the direction is down, but the spread of roughly 10,000 roles shows how hard silent, performance-linked exits are to count when there is no formal layoff notice.
About the Estimators
TeamLease Digital is a talent solutions arm of TeamLease Services, one of India’s largest staffing companies, headquartered in Bengaluru and serving the IT industry with hiring and workforce data. CIEL HR Services is a Bengaluru-based tech-led staffing and HR consultancy that tracks hiring and attrition trends across the technology sector. Both firms feed the Indian IT ecosystem with placement and workforce analytics that shape how the sector reads its own health.
Why is AI driving these IT job cuts?
AI is driving these IT job cuts because it lets companies redesign work rather than simply cut costs. This year’s exits differ from prior downturns. Earlier rounds were tied to weak demand and down cycles, but the current wave is tied to AI-driven productivity gains, skill mismatches, and organisational simplification, industry experts say. TeamLease notes that most of the latest cuts stem from redesigning the workforce, not shrinking it.
Unlike previous cycles, this is a structural, not cyclical, correction driven by AI-led productivity compression, slower global discretionary tech spending, and a pivot away from legacy services, said Neeti Sharma, chief executive of TeamLease Digital.
Industry executives said companies and startups are simplifying structures, cutting role duplication, and leaning more on automation. The message is consistent: repetitive, process-driven work is the first to be handed to machines.
How are the top IT firms trending?
The top five Indian IT firms cut a combined 7,389 roles in FY26, reversing net gains of 12,718 in FY25. While hiring picked up modestly in FY25 after about 69,000 job cuts in FY24, companies stayed cautious, holding new roles in select functions. TCS made the single largest reduction, cutting its headcount by 23,460 employees, according to TCS company disclosures. Bengaluru-based Infosys added about 5,000 roles over the year, per Infosys investor updates.
| Firm | FY26 headcount trend | Signal |
|---|---|---|
| TCS | Down 23,460 | Largest cut, AI-first pivot |
| Infosys | Up about 5,000 | Steady fresher intake |
| Top five, net | Down 7,389 | First negative year in three |
What sets this cycle apart is that TCS cut deeply while three of the five firms still added staff on a net basis, showing the pain is concentrated, not sector-wide.
What do the IT job cuts mean for workers?
For tech workers, the IT job cuts signal a shift in which skills stay safe. Repetitive, process-driven roles are most exposed, while AI, cloud, and data skills are in demand. Mid-level managers face the sharpest risk, as firms flatten layers and remove duplicated functions. Reskilling into AI-linked work is now the clearest path to staying employable through this correction.
What’s Next
The next signal comes with H1 FY27 results, due around October 2026, when fresher-hiring plans and net headcount will show whether the cuts have peaked. TCS has guided to roughly 25,000 fresher hires in FY27, well below the old 40,000 range. Will AI-skilled hiring rise fast enough to absorb the workers leaving legacy roles?
Frequently Asked Questions
Disclaimer: This article is for informational purposes only and does not constitute investment advice. StartupFeed and its authors are not SEBI-registered investment advisors. The analysis above is based on publicly available information and should not be the sole basis for any investment decision. Please consult a SEBI-registered financial advisor before making investment decisions.
Written by Avinash. Have a tip? Write to us at editorial@startupfeed.in.
