AI and Cost Pressures Trigger Major Layoffs Across India’s Tech Sector

India’s technology industry is grappling with a wave of large-scale layoffs as companies—from IT giants to fast-growing startups—streamline operations amid slowing demand, rising costs, and rapid AI adoption.

TCS Leads with 12,000 Layoffs

Tata Consultancy Services (TCS) has announced the largest workforce reduction, letting go of nearly 12,000 employees in 2025. The move comes as global clients cut discretionary IT spending, forcing TCS to focus on automation, efficiency, and margin protection. This scale of downsizing underscores that even the most resilient IT firms are not immune to structural shifts in technology and client demands.

Oracle Cuts 10% of India Workforce

Global software major Oracle Corp. has reduced its India headcount by approximately 2,882 employees, nearly 10% of its workforce in the country. The cuts align with Oracle’s pivot toward AI and cloud services, following its strategic partnership with OpenAI. This signals a reallocation of resources into high-value, AI-driven solutions.

Startups Restructure Aggressively

• Ola Electric laid off 1,000 employees, primarily in customer relations, front-end sales, service, and warehouse operations. The restructuring highlights a cost-control focus as the EV company prepares for scale.
  
  
• Zepto, the fast-growing quick-commerce platform, cut 400 employees, reflecting intense competition and the need to prioritize operational efficiency.
  
  
• CARS24 has laid off a total of 320 employees this year, citing funding constraints and slower demand in the used car marketplace.
  

What’s Driving the Layoffs?

The common themes across India’s tech sector include:

• AI-driven automation reducing the need for manpower in certain roles.
  
  
• Cost pressures from global macroeconomic headwinds and tighter investor funding.
  
  
• Margin protection strategies as firms prepare for a leaner, more efficient growth cycle.
  
  
• Competitive pressures in consumer-tech and e-commerce sectors driving consolidation.
  

Outlook

While the layoffs mark a challenging phase for India’s tech workforce, they also indicate an industry-wide reset. Firms are adapting to a future where AI, automation, and cloud services dominate. In the longer term, these tough decisions may position both IT majors and startups for greater resilience and profitability.

 Key takeaway: India’s tech sector is undergoing a painful but necessary transition—streamlining costs today to stay competitive in tomorrow’s AI-first world.