New Delhi, Dec. 30 -- After years of steady hiring and expansion, India's technology sector spent much of 2025 grappling with a tougher reality-slowing growth, tighter cost controls, and automation reshaping workforce needs. Layoffs across IT services firms, startups and global technology majors marked one of the most significant employment corrections in recent memory. Yet, unlike past downturns, this wave was less about crisis and more about recalibration. From large IT vendors to consumer-facing startups, job cuts reflected a broader shift in priorities-from scale to efficiency, from manpower-heavy delivery to AI-led execution.
Big IT services firms feel the heat
The most consequential job losses came from India's IT services sector. Tata Consultancy Services (TCS), the country's largest private employer, announced a 2% reduction in its workforce, equating to nearly 12,000 jobs, with some sources suggesting that the actual numbers may be higher. While the company described the move as a "skill realignment exercise," it marked the first large-scale correction in its headcount in years.
Other large IT firms subtly followed suit. Infosys, Wipro and HCLTech slowed campus hiring sharply, cut lateral intake and released underutilised employees through performance management cycles. Industry estimates suggest that India's top six IT services firms together shed 25,000-30,000 jobs in 2025, even as overall attrition moderated.
The slowdown in discretionary tech spending from global clients, especially in banking, retail and technology, forced vendors to prioritise margins and utilisation. Generative AI further reduced the need for manpower-heavy roles such as application maintenance, manual testing and entry-level support.
Startups saw job cuts as funding tightened
India's startup ecosystem saw sharper and faster job cuts. After aggressive hiring during the 2020-22 funding boom, many companies entered 2025 with bloated cost structures and limited access to fresh capital. According to startup-focused layoff trackers, Indian startups cut 20,000-25,000 jobs during the year.
Ola Electric emerged as one of the most prominent examples, laying off over 1,000 employees across manufacturing, engineering and corporate functions as it moved to streamline operations post listing. The cuts highlighted the pressures facing capital-intensive businesses in a more disciplined funding environment.
Gaming startups were among the worst affected. Mobile Premier League and Gameskraft together cut close to 1,000 roles, hit by regulatory uncertainty, higher compliance costs and slowing user growth. Enterprise SaaS and messaging platform Gupshup also reduced headcount by several hundred as it consolidated operations and exited non-core markets. For startups, 2025 marked the definitive end of growth-at-all-costs hiring and a pivot towards leaner, revenue-aligned teams.
Global tech layoffs ripple into India
Global technology giants also contributed to the job losses. Companies such as Amazon, Microsoft, Google and Meta announced multiple rounds of global layoffs through 2025, cutting tens of thousands of roles worldwide. While India was not the primary geography, the impact was visible through hiring freezes, team consolidation and the closure of certain global support functions.
Industry estimates suggest that global tech restructuring led to 5,000-8,000 India-linked job losses, including direct layoffs, contract exits and role eliminations tied to global teams. Oracle also reduced its India workforce as it accelerated its pivot to cloud and AI-native offerings. For multinational firms, India's positioning continued to evolve from a low-cost delivery hub to a high-productivity talent base, raising expectations and reducing tolerance for redundancy.
How AI played a part
What sets the 2025 layoffs apart is the role of artificial intelligence. AI did not merely improve productivity; it actively replaced several categories of work. Entry-level testing, basic analytics, reporting and tier-one customer support roles saw the highest erosion.
Even as companies cut jobs, they struggled to hire talent in AI engineering, data platforms, cybersecurity and cloud infrastructure. This resulted in a paradoxical labour market where layoffs and skill shortages coexisted, particularly in mid-to-senior specialised roles. Reskilling programmes expanded across IT firms, but the pace of AI adoption often outstripped companies' ability to redeploy talent internally.
A leaner tech industry takes shape
To conclude, the layoffs of 2025 saw the industry moving towards leaner teams, higher productivity and greater use of automation and specialised skills. If the post-pandemic years were about speed and scale, this year was about structure and sustainability. The workforce reset, as industry observers believe, is set to influence hiring, wages and career paths in India's tech sector in the coming months.
Published by HT Digital Content Services with permission from TechCircle.