TCS Layoffs sheds 12,000 jobs amid rising tech layoffs. Is AI disruption to blame, or are deeper cost pressures and skill gaps driving the cuts? Full update.
TCS Layoffs Raise New Questions in Tech Industry
Tata Consultancy Services (TCS) has announced the layoff of 12,000 employees globally in July 2025, accounting for nearly 2% of its workforce. This move aligns with a troubling trend sweeping the global tech industry — a wave of job cuts driven by a mix of AI disruption, cost control, and post-pandemic recalibration.
In the first half of 2025, more than 94,000 tech professionals have lost their jobs worldwide. While some blame artificial intelligence, others point to deeper restructuring needs and shifting business models.
Tech Layoffs in 2025: A Global Restructuring Wave
The tech industry is undergoing a massive transformation:
- 507 roles per day are estimated to be eliminated globally.
- Major firms like Microsoft, Intel, Meta, and Salesforce have announced thousands of job cuts.
- Most of these layoffs are being described as part of an “AI-first transformation” or broader operational efficiency strategies.
Despite the widespread narrative that AI is replacing human jobs, many experts caution that the reasons are far more nuanced.
TCS Layoffs 2025: Not Just About AI
What TCS Said About Its Decision
TCS CEO K. Krithivasan recently told Moneycontrol that the decision to cut 12,000 roles wasn’t solely due to AI. He stated:
“AI giving some 20% productivity gains is not the reason. The real issue is a skills mismatch and deployment feasibility, especially at the mid and senior levels.”(TCS Layoffs)
The company, which employs over 613,000 people worldwide, has invested heavily in upskilling. Over 500,000 employees have undergone AI-related training. However, Krithivasan admitted that some employees could not adapt to the company’s evolving, product-aligned model.(TCS Layoffs)
Internal Restructuring & Legacy Challenges
The layoffs reportedly affect those:
- Trained in legacy project-management models.
- Unable to transition to Agile or product-first roles.
- Working in domains with shrinking client demand.
TCS emphasized that these changes are aimed at building a “future-ready organization,” one that’s leaner and more aligned with digital transformation goals.
Microsoft, Intel & Meta: AI Reshaping Workforces
Microsoft: “Unlearning to Move Forward”
Microsoft has laid off over 15,000 employees in 2025 alone. CEO Satya Nadella described this as part of the company’s push to become an AI-first enterprise.
He stated:
“This is a process of unlearning and relearning — to evolve with automation-driven productivity.”
These layoffs span across support, engineering, and product teams, and align with Microsoft’s heavy investment in Copilot, Azure AI, and other generative AI tools.
Intel’s 24,000 Job Cuts: Efficiency Over Expansion
Intel recently announced the reduction of 24,000 roles in a bid to become a “smaller and more efficient organization.”
Although CEO Lip-Bu Tan did not directly blame AI, he acknowledged the competitive gap with NVIDIA in the AI chip race. He said:
“It’s too late to catch up in some segments, but we’re restructuring to focus on what matters most.”
This reinforces the idea that tech layoffs are about realigning business goals rather than AI replacing workers directly.
Is AI a Scapegoat or Catalyst?
On platforms like Reddit and LinkedIn, many employees and analysts are voicing concerns that AI is becoming a convenient scapegoat.
“AI may be the buzzword, but it’s really about cost-cutting,” says a former Salesforce employee on LinkedIn.
Key drivers behind the layoffs include:
- Investor pressure for higher profit margins.
- Overhiring during the 2020–2022 tech boom.
- Shift from service-based to product-based models.
- Automation of repetitive tasks, like code testing and customer support.
AI vs Economics: What’s Fueling the Layoffs?
| Factor | Impact on Layoffs |
|---|---|
| AI & Automation | ✅ Partial Driver |
| Economic Uncertainty | ✅ Major Driver |
| Cost Optimization Goals | ✅ Major Driver |
| Skill Gaps in Workforce | ✅ Significant |
| Legacy System Redundancies | ✅ Increasing |
While AI is enabling companies to do more with fewer people, the layoffs also highlight the urgent need for upskilling, reskilling, and organizational adaptability.
Global Tech Layoffs Data 2025
👉 Layoffs.fyi – Real-time Tech Layoffs Tracker
FAQs: Most Asked Questions About Tech Layoffs 2025
1. Is AI really causing mass layoffs in tech companies?
AI is a contributing factor but not the sole reason. Many layoffs are due to cost pressures, skill mismatches, and post-COVID business corrections.
2. How many employees did TCS lay off in 2025?
TCS announced the layoff of 12,000 employees globally, impacting around 2% of its workforce.
3. Are Indian IT firms also affected by AI-driven changes?
Yes, major Indian IT companies like TCS Layoffs, Infosys, and Wipro are undergoing AI-focused restructuring, requiring large-scale reskilling efforts.
4. Which companies have announced major layoffs in 2025?
So far in 2025, companies like Microsoft, Meta, Intel, Salesforce, and TCS Layoffs have led with large workforce reductions.(TCS Layoffs)
5. Can upskilling help avoid TCS Layoffs?
Yes. Employees skilled in AI, cloud computing, cybersecurity, and data science are better positioned to survive industry transitions.
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What do you think — is AI a true disruptor or a smokescreen for cost cuts?
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