The Ministry of Electronics and Information Technology (MeitY) is closely observing the recent developments following Tata Consultancy Services' (TCS) decision to lay off approximately 2% of its workforce, government sources told Moneycontrol.
On July 27, Moneycontrol reported that the IT major plans to reduce its headcount by around 12,000 employees in an effort to become more agile and future-ready. The layoffs are expected to affect mainly middle and senior-level staff, as well as some entry-level associates who have remained on the bench for extended periods.
Government sources emphasized that both industry and academia must play a proactive role in addressing challenges related to skill development and re-skilling. “We are monitoring the situation closely. The need for industry-academia collaboration in upskilling efforts is more critical than ever,” a source said.
While the layoffs come amid ongoing technological disruptions, TCS CEO K. Krithivasan clarified in an interview with Moneycontrol that the move is not directly related to AI adoption or productivity gains. Instead, it is aimed at addressing skill mismatches and underutilization of resources. “This isn’t about AI driving 20% productivity gains. It’s about roles where we either see a mismatch in skills or have been unable to deploy talent effectively,” Krithivasan explained.
Meanwhile, the government continues its efforts to boost employment through initiatives like the Employment Linked Incentive (ELI) scheme. Approved by the Union Cabinet on July 1, the ₹99,446 crore scheme aims to create over 3.5 crore jobs in two years, with wage support of up to ₹15,000 for first-time employees and incentives for employers generating new jobs.
MeitY expects the electronics and IT sectors to benefit significantly from this scheme and urges continued dialogue with industry stakeholders to align workforce skills with evolving technology demands.
