IT Giants Shift Strategies Amid Layoffs, Impacting Freshers

The landscape of the information technology sector in India is undergoing significant changes, as major firms like TCS, Infosys, and HCLTech are implementing layoffs despite reporting stable or increasing earnings. These moves reflect a shift from the traditional growth model of hiring more employees to a new approach focusing on fewer staff and enhanced productivity.

Recent announcements indicate that TCS has laid off over 12,000 employees, representing 2 percent of its workforce, while Infosys has reduced its recruitment of fresh talent, hiring only 15,000 trainees in FY 2025, a stark decline from previous years. Other companies in the sector, such as HCLTech, have also slowed their hiring processes, creating a challenging environment for new graduates entering the job market.

Financial Performance vs. Workforce Reduction

In the first quarter of the financial year 2026, spanning April to June 2025, TCS reported a revenue of Rs 63,437 crore, an increase of 1.3 percent. Profits during the same period also rose by 5.9 percent. Similarly, Infosys’ revenue climbed by 7.5 percent, reaching Rs 42,279 crore, while HCLTech recorded an impressive growth of 8.1 percent.

Despite these positive financial indicators, the reduction in workforce raises questions about the sustainability of such profits in the long term. The trend of layoffs, coupled with a decrease in hiring fresh graduates, creates uncertainty for many in the industry who rely on these opportunities for career advancement.

Driving Factors Behind Job Cuts

Two primary factors are influencing these layoffs: the rise of artificial intelligence (AI) and the evolution of recruitment strategies. Companies like TCS, Infosys, and HCLTech are increasingly adopting AI and generative AI technologies to enhance operational efficiency. According to K Krithivasan, CEO of TCS, “The ways of working are changing; we have to be prepared for the future.” This shift towards automation has allowed companies to streamline processes but has also led to a reduction in the need for human labor.

Additionally, the traditional pyramid model of recruitment, which emphasized hiring a large number of junior employees while limiting senior positions, is being challenged. As AI takes over basic tasks, firms are shifting towards skill-based hiring practices, making it increasingly difficult for fresh graduates to secure jobs. Companies like Infosys have tightened their training and selection processes, further complicating the landscape for new entrants.

In this evolving environment, the future of employment in the IT sector appears uncertain, particularly for fresh graduates who face a tougher job market. As these companies continue to focus on efficiency and profitability, the challenge will be maintaining a balance between technological advancement and the workforce’s well-being.