IT sector witness layoffs amidst AI refocus

(TCS) will cut about 2% of its global workforce, translating to over 12,000 jobs. This marks TCS’s second major layoff, the previous one being in 2012, driven then by underperformance. The move is part of a broader AI-driven organisational overhaul, with TCS aiming to become a more agile and tech-forward enterprise. The layoffs primarily affect mid- to senior-level employees, aligning the firm’s structure with evolving technology needs. Under a new internal initiative called Project Fluidity, underperforming senior consultants and managers may face benching or exits, a sign of increasing performance scrutiny. TCS had a net hiring of 5,090 in Q1FY26, down from 5,452 in Q1FY25. Peer firms like , , and ro show mixed hiring data — with HCLTech posting a net reduction of 269 in Q1FY26. The tech layoff wave includes Microsoft (9,000), IBM (8,000), and Intel (22%), indicating an industry-wide shift driven by automation, AI integration, and cost optimization.