In the past two years, Tata Consultancy Services (TCS), India’s largest IT services firm, has quietly let go of over 12,000 employees. This is not an isolated case. From 2023 to 2025, India’s top five IT companies—TCS, Infosys, Wipro, HCLTech, and Tech Mahindra—have cumulatively shed nearly 70,000 jobs, marking a sharp reversal from the hiring frenzy of the Covid-era.

Despite the relentless PR narrative around AI, digital transformation, and consulting pivot strategies, the truth is now evident: the job engine that powered India’s middle class is sputtering. This slowdown has an impact on the city economy across the country, and it will also reverberate in the small towns across India. While the leadership of these companies may have failed to plan for this eventuality, the policymakers have also not fully understood the impact of this job engine on future job growth.

A close look at the numbers tells a sobering story. Between FY21 and FY22, during the height of the pandemic, IT companies added employees at a record pace. TCS went from 509,000 to nearly 592,000, adding over 100,000 in a single year. Infosys grew aggressively, peaking at 345,000. Wipro, HCLTech, and Tech Mahindra all followed suit, hiring tens of thousands in anticipation of sustained digitisation demand from global clients. Attrition at this time hit unprecedented highs—Infosys saw nearly 28 per cent attrition in FY22—but firms kept onboarding to stay ahead of demand.

That hiring momentum came to an abrupt halt by FY23. By FY24, TCS had dropped to 601,000 employees, Infosys to 317,000, and Wipro to 234,000. Tech Mahindra lost nearly 7,000 employees, while only HCLTech held steady with marginal gains. FY24 was the first time in almost two decades that TCS reported a net reduction in its headcount. In total, across just two years, the top five firms lost close to 70,000 jobs. Every job in the IT sector creates 8-12 jobs downstream in the economy. These downstream jobs include the support ecosystem of maids, cleaners, consumption-based jobs in restaurants, and food producers, etc. The downstream jobs are generally blue-collar jobs. In the past, these companies would have moved these people to the bench, where they would be retrained or kept till such time as there were new projects. But the fact that these people have been asked to leave means that they cannot be retrained for new projects.

These are not cyclical cuts. They reveal a more profound structural change in the sector. The Indian IT industry was a manpower-based billing model—charging clients based on hours worked,........

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