Tata Consultancy Services (TCS), India's largest IT services firm, has announced a layoff of 2% of its global workforce, impacting approximately 12,200 employees, as part of a strategic transformation to adapt to technological changes, particularly in artificial intelligence (AI) and digital services.

The company's CEO, Krithivasan, explained that despite investments in employee growth, some roles had not been effectively redeployed, necessitating this workforce reduction.

The layoffs are expected to primarily affect middle and senior management positions, reflecting a broader trend in the industry.

Recent earnings reports indicate that Indian IT companies are facing revenue shortfalls and declining margins, despite an increase in order book inflows.

Amidst rising concerns about job security, a significant 74% of workers in India fear that AI could displace their jobs, highlighting the urgency for upskilling.

A report from Bain & Company reveals that while AI job postings have surged by 21% annually since 2019, the growth of skilled talent has not kept pace, leading to a projected shortage of 1.1 million AI professionals by 2027.

As IT hiring slows down, emerging industries like Global Capability Centres (GCCs) and the startup ecosystem are becoming viable alternative employment pathways for engineers.

The article suggests a systemic challenge for the IT industry, as firms prioritize efficiency and cost-cutting over growth, leading to what is being termed a 'Great Tech Recalibration'.

TCS aims to enhance operational excellence and innovation by leveraging data and AI to improve performance amidst a climate of cost optimization.

The discussion around the importance of apprenticeship programs for young tech professionals in India emphasizes the need to bridge the skills gap and provide financial support during education.

Nasscom reports a 35% oversupply of mid-level IT professionals in the job market, prompting smaller firms to pause hiring as competition for jobs intensifies.

Foreign Institutional Investors (FIIs) have reduced their holdings in IT stocks to a 13-year low, reflecting a lack of confidence in the sector's ability to adapt to current challenges.