The Ministry of Electronics and Information Technology (MeitY) has stepped in to closely monitor TCS’s decision to lay off around 2% of its employees, a move that has sparked fresh concerns in the Indian IT industry. The development comes at a time when the sector is rapidly evolving due to technological disruptions.
On July 27, Moneycontrol reported that Tata Consultancy Services (TCS) will let go of approximately 12,000 employees, as part of its internal restructuring to become more agile and future-ready.
Click here to explore other Tata Consultancy Services (TCS) Stock Price
Layoffs Driven by Skill Mismatch, Not AI: TCS CEO
While many initially speculated that artificial intelligence (AI) was behind the job cuts, TCS CEO K Krithivasan clarified in an exclusive interview that the move is not related to AI-led productivity gains. Instead, he said the layoffs are a result of skill mismatches and cases where certain employees could not be deployed effectively.
“This is not because of AI giving some 20 percent productivity gains… this is driven by skill mismatch,” said Krithivasan.
The job cuts are likely to impact middle and senior-level employees, along with some entry-level associates who have remained on the bench for an extended period.
Also Read: IDFC First Bank Q1 Profit Slumps 32%; Asset Quality Under Pressure
MeitY Calls for Industry-Academia Collaboration
In response to the development, MeitY has urged the industry and academic institutions to prioritize skilling and re-skilling. A senior government source emphasized that “Industry and academia will also have to address skilling and re-skilling-related issues. We are keeping a close eye on all of this.”
This call highlights the need for a stronger connection between educational institutions and industry needs, ensuring that India’s workforce stays relevant amid constant technological transformation.
Government Pushes Employment-Linked Incentive Scheme
To support job creation and industry transformation, the government has introduced the Employment Linked Incentive (ELI) Scheme, approved by the Union Cabinet on July 1. With an outlay of ₹99,446 crore, the scheme aims to create over 3.5 crore new jobs over a two-year period.
First-time employees will receive wage support up to ₹15,000, while employers will get incentives for generating new jobs.
Officials hope that the electronics and IT industry will significantly benefit from this scheme, especially as companies like TCS adjust their workforce strategies in response to evolving market dynamics.
A Turning Point for India’s IT Workforce
With one of the largest IT companies undergoing a major workforce shift, the incident is being seen as a wake-up call for the entire sector to invest more in future-ready skills. MeitY’s proactive stance and government-backed initiatives like the ELI scheme reflect a broader push to ensure that India’s tech talent remains globally competitive and resilient.
