TCS Layoffs Rock Indian Tech: Ex-CEO Warns It's Time to Evolve or Perish

A New Era Dawns for India’s IT Giants

The Indian IT sector is undergoing a seismic shift. Tata Consultancy Services (TCS), one of the biggest employers in the country’s tech landscape, recently made headlines by announcing the layoff of 12,000 employees—about 2% of its workforce. This move, though jarring, is being framed not as an effect of AI replacing jobs, but as a result of a growing mismatch in skills and the urgent need for realignment in a rapidly evolving business environment.

Amid this industry shakeup, CP Gurnani, the outspoken former CEO of Tech Mahindra, issued a bold message to India’s IT professionals: stop counting heads and start counting outcomes. Quoting the famous line from Sholay, “Kitney aadmi the?,” Gurnani invoked nostalgia to deliver a disruptive message—urging the industry to break free from outdated models and focus on innovation, specialization, and agility.

Let’s explore how TCS’s recent actions and Gurnani’s rallying cry are a wake-up call for a tech sector stuck in an outdated delivery model.

📌 Summary:

Tata Consultancy Services (TCS) has announced it will lay off approximately 12,000 employees, representing 2% of its total workforce. The company stated the decision was not AI-driven, but rather due to a skill mismatch and a need to realign its talent pool with current and emerging business needs. CEO K Krithivasan clarified that the layoffs stemmed from deployment feasibility—not productivity gains from automation or artificial intelligence.

This isn’t an isolated case. Competitors like Infosys and Wipro have also experienced headcount reductions of over 12,000 and 25,000 employees, respectively, over the last two years. HCLTech followed suit with restructuring initiatives rooted in location and skill disparities.

In light of these changes, former Tech Mahindra CEO CP Gurnani has taken a firm stance. Speaking to CNBC-TV18, he challenged the Indian tech industry’s long-standing reliance on a pyramid-style delivery model. Instead, he proposed a shift toward outcome-based models, specialized skills, and productivity-centric strategies. His commentary comes at a time when roles such as basic coding, testing, and documentation are rapidly being automated, becoming increasingly obsolete.

Ganesh Natarajan, former chairman of NASSCOM, echoed Gurnani’s sentiment, likening the pyramid structure to “Jurassic Park material.” He highlighted how agentic AI—AI systems that autonomously carry out complex tasks—is already disrupting team compositions and delivery frameworks.

Experts suggest that these job cuts aren’t solely caused by automation but are also being influenced by market share realignments and vendor consolidation. The most vulnerable roles? Entry-level positions in BPOs and customer service, which are being cannibalized by AI solutions.

🧠 What Undercode Say: The Indian IT Model Must Adapt or Face Extinction

The TCS layoffs aren’t just numbers—they’re a symptom of a deeper malaise affecting India’s tech giants. The truth is, the traditional IT model that has sustained Indian companies for decades is aging out of relevance. For years, firms like TCS, Infosys, and Wipro relied on scale, churning out thousands of coders and support agents. This “people-heavy” approach worked wonders in the early 2000s when cost arbitrage and standardization reigned supreme.

But today’s clients want agility, innovation, and deep specialization—not an army of average. The emergence of agentic AI and no-code/low-code platforms means repetitive tasks are disappearing fast. The pyramid model, which thrives on a vast base of junior resources, is now a liability rather than an asset.

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TCS’s decision to emphasize “deployment feasibility” shows a willingness to transition. But to truly lead, they—and others—must look beyond cosmetic restructuring. Indian IT needs to abandon its dependency on “bench strength” and move towards dynamic, project-based team structures fueled by upskilled professionals.

This transformation won’t be easy. Thousands of employees trained for legacy systems and low-level tasks will face career uncertainty. But this also opens the door for a renaissance—where upskilling, cross-functional learning, and AI fluency become the norm.

The real winners will be those who embrace this disruption, not resist it. Companies that invest in retraining their workforce and reorienting toward high-skill, high-value services will thrive. Those that cling to outdated hierarchies and labor models will crumble under competitive pressure—especially as global clients shift contracts to nimble, AI-native startups.

In essence, Indian IT is at a fork in the road: evolve and innovate or risk becoming irrelevant. Gurnani’s warning should not be taken lightly. The Jurassic era of the IT pyramid is over—it’s time to build lean, intelligent, and adaptive ecosystems for the AI-driven future.

🔍 Fact Checker Results

✅ Layoffs confirmed: TCS officially announced a 12,000 employee cut.
✅ AI not the cause: The company clarified the move was due to skill mismatch, not AI.
❌ Automation blamed universally: While automation plays a role, market shifts and delivery realignment are also major factors.

📊 Prediction: AI-Native Firms Will Disrupt Legacy IT Giants

The next five years will see rapid fragmentation of traditional IT services. Startups and AI-native firms—offering specialized, faster, and cheaper solutions—will eat into the market share of old-guard players like TCS and Infosys. Expect these giants to undergo aggressive restructuring, M\&A activity, and major investments in AI-driven platforms. Those who fail to adapt will be relegated to maintenance contracts or become acquisition targets themselves.