Tata Consultancy Services, India's largest private employer, cut 12,200 middle and senior managers last year. It also trained 114,000 employees in AI. Both happened while the company posted record revenue of more than $30 billion.
Across India's five biggest IT services firms, every company earned more in fiscal year 2026 while employing fewer people. The combined workforce shrank by 7,389, according to Moneycontrol. The previous year, those same employers had added 12,718 jobs.
India's outsourcing industry employs nearly six million people and contributes an estimated 12% of the country's GDP. Economists have begun warning that AI could eliminate white-collar jobs faster than past waves of automation, and the sector where the entire business model depends on billing clients for human hours is where that's already happening. The cuts at TCS targeted experienced staff in roles "where redeployment and reskilling have not been feasible," according to The Federal.
Infosys, the country's second-largest IT services firm, lost 8,440 workers in the fourth quarter of fiscal year 2026 alone, according to Moneycontrol, even as the company reported a 4.2% revenue increase in constant currency for fiscal year 2025. AI services are filling the gap. Infosys CEO Salil Parekh told analysts that AI work accounted for 8.2% of total revenue by the first quarter of fiscal year 2027, growing at a double-digit pace.
Srini Pallia, CEO of Wipro, another of India's top five IT firms, said in the company's second-quarter fiscal year 2026 earnings call that "AI is no longer experimental" and now "central to our clients' strategies." Industry revenue grew 6.1% to $315 billion in fiscal year 2026, outpacing the 2.3% headcount increase to 5.95 million employees, according to Nasscom, the trade body that represents India's IT sector. Net additions of about 135,000 workers barely exceeded the prior year's 133,000. That's because the industry didn't need a bigger workforce.
AI had contributed around 4% of total sector revenue, reaching the $10 billion to $12 billion range for the first time. As AI handles more of the work, clients are asking why they should keep paying for the hours a human engineer needs to troubleshoot the problem. AI reduces the time needed to provide the same result, and the companies paying the bills have started demanding lower rates to match.
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