India’s IT companies are giving a positive spin to the Q3 numbers they have been releasing in the past two weeks, but the headcount figures tucked away in the small print will bring no cheer, neither to youngsters coming into the job market nor to experienced employees. For the country at large, underreported headcount trims in the IT industry, combined with job losses in the tariff-hit sectors, make for grim tidings ahead of the annual budget presentation.
The IT sector likes to describe its silent layoffs as “strategic restructuring” to become “AI-first”. Whatever the spin, the numbers are scary. This week, it was reported that the top five IT firms — TCS, Infosys, Wipro, HCL Tech, and Tech Mahindra — put together added only 17 employees in this financial year. Compare that with the 18,000 hirings last year.
There are no indications that the bloodletting will stop anytime soon. Industry leader TCS revealed that it slashed its headcount by nearly 20,000 — albeit worldwide — in the second quarter due to its pivot to an AI-facing profile. Its latest results showed that 11,000 more staff were let go, both at entry and middle levels. Amazon announced plans to cut 16,000 jobs this week, with a direct impact on staff in its India operations.
What must worry the Centre is that job losses are occurring across sectors and layers of hierarchy. Not only have fresh recruitments from colleges dried up, but senior professionals are being eased out for cost as well as AI capability reasons. Staffing consultancies are reporting that active tech job openings have dropped 24% year-on-year as of this January, a post-COVID low.
Add the bloodletting in the IT industry to the massive ongoing labour cutbacks in the textiles, jewellery and leather industries during the 50% tariffs imposed on India by the US, and you get a sense of the scale of the problem. Some states have been hit particularly hard by the Trump tariffs. In just the textile sector of Tamil Nadu, for instance, approximately 2,00,000 employees are reportedly out of work since the tariffs took effect in August 2025. Annual textile exports to the US from this sector dropped from roughly $1.7 billion to less than $1 billion. In the gems and jewellery sector in Gujarat, over 75,000 workers have been laid off from diamond polishing units. Reports on job losses in the other sectors, such as footwear and chemical manufacturing, have ranged from 40,000 to 2,00,000.
What we have is a 360-degree jobs crisis that cannot be wished away by looking the other way, or explained away by citing the pakora parable, or deflected by blaming someone else, or by disputing the numbers. If the problem has acquired mountainous proportions now, it is because the government dealt with it as a trifle when it was still in the making, or with misguided policy approaches. Last year, the government defined the problem as a skill deficit and addressed it with an internship scheme, which has had no impact at all. Then it adopted a policy to export manpower to foreign locations under the misguided notion that Indians abroad will become a source of remittances and soft power. That too has run aground in the face of anti-migration headwinds globally. The time has come to wake up to the real magnitude of the problem.