Two major tech giants — one in India and another in the US — are letting people go, but the narratives around those layoffs seem diametrically opposite.
When TCS CEO K Krithivasan addressed the company’s move to lay off 12,000 employees, he blamed “skill mismatch” and “organisational shifts” from waterfall to agile. But anyone paying attention could read between the lines. These are AI layoffs — just not the kind you’re allowed to say out loud in India.
Microsoft, on the other hand, is making no effort to hide it. Layoffs are framed as part of a larger, aggressive push into AI. The message is that redundancy is the price of transformation.
Microsoft basically wants Wall Street to know it’s moving fast and hard on AI, even if that leads to job cuts. TCS wants the Indian government and public to know that the company still values human capital, even if the spreadsheets say otherwise.
“The difference lies in the optics—Microsoft spoke to Wall Street, TCS to its workforce and government. Each tailored their AI narrative to their stakeholders. But neither can sidestep the broader truth: AI is rewriting the rules of workforce economics,” Sanchit Vir Gogia from Greyhound Research, told AIM.
At least Microsoft admits it. But even that’s strategic — it’s not guilt, it’s messaging.
“CEO Satya Nadella and president Brad Smith made it clear that the company’s unprecedented $80+ billion in AI infrastructure investment required operating efficiency—and by extension, headcount reduction. This was a message tailored for investors, not employees,” Gogia added.
Guilt of Layoff?
Microsoft CEO Satya Nadella, in a memo on July 24, said that the layoff of 15,000 people over the course of the last 12 months has been “weighing heavily” on him.
“These decisions are among the most difficult we have to make. They affect people we’ve worked alongside, learned from, and shared countless moments with,” Nadella said, while adding that he is grateful for their contributions to the objectively thriving market performance of Microsoft.
The company seems willing to trade workforce stability for positioning itself as the leader in the AI economy.
Google also has a similar story. According to a report by Financial Express, CEO Sundar Pichai is also concerned. He said to Google employees in an internal memo amidst the TCS layoff that employees basically have to use more AI tools.
“I think we have to accomplish more,” Pichai said. “The world is looking to Google for leadership and responsible innovation.” But it does not just stop here.
According to the report, Pichai further highlighted that the firm needs to optimise internal processes and actively reduce redundancy, while maximising team output. Overall, being more AI-savvy.
Though, it doesn’t directly call out for layoffs, it is definitely similar to what Microsoft said. And in fact, the company has indeed laid off “hundreds of employees” in 2025 alone.
While the layoffs are rampant, the hope is that they would hire more people in the end. “Both [TCS and Microsoft] are right sizing, they will hire new talent,” Mohandas Pai, former CFO of Infosys, told AIM.
He added that Indian IT’s bid to keep it mellow is also to avoid publicity.
Gogia also reflected the same. “This stance reflects the unique realities of India’s employment ecosystem, where mass layoffs attract regulatory scrutiny, union backlash, and public unease. TCS’s narrative had to address not just shareholders, but employees, regulators, and clients—preserving its brand as a socially responsible, stable employer.”
Admitting to Lose More?
Indian IT is still trying to soften the blow. Not because it’s nicer. But because it has more to lose by admitting the truth. Similar to TCS, HCLTech CEO, C Vijayakumar also hinted that layoffs are possible, but did not directly attribute it to AI.
“We have had a good amount of people released due to productivity improvements. Now, not all of them are readily redeployable because the requirements for some of the entry level or lower end skills are being addressed through automation and other elements,” Vijayakumar told analysts during a post-earnings call last month.
For years, India’s IT industry has survived on a simple formula of growing the number of employees. Now, that model has a competitor — actual AI. And to Indian IT’s credit, the companies have convinced everyone that AI is now part of their daily workings and are building hundreds of AI agents.
But, the revenue from these AI investments is still far away. This, and the fact that firms are publicising AI adaptability and gains, indicates towards possible headcount reductions.
At TCS, for example, over 114,000 employees are now equipped with ‘higher-order AI skills’, said Milind Lakkad, the outgoing CHRO. The company did not quantify how this would translate to revenue, productivity, or delivery improvements.
The layoffs are not the story. They’re just a sign of denial. As Amit Maheshwari, CEO of Softlink Global, put it across in a LinkedIn post: “AI isn’t evil — it’s just powerful. Denial isn’t a strategy — adaptation is.”
The Indian IT industry never invested in R&D, never built foundational tools, and never imagined it could be a creator of tech instead of just a low-cost executor. Now, it’s scrambling to make the restructuring look like a skills issue rather than a complete shift in the game.
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