Karnataka’s IT Minister Priyank Kharge has announced that the state is in talks with companies to assess the impact of artificial intelligence (AI) on the workforce. The evaluation, expected to conclude in about a month, comes at a time when the IT industry is facing large-scale layoffs and macroeconomic headwinds.
The development follows Tata Consultancy Services (TCS)’ decision to cut 12,000 jobs — roughly 2% of its global workforce — this year. The move has rattled the tech sector, already grappling with sluggish growth, geopolitical uncertainty, and delayed client spending decisions.
TCS’ Workforce Realignment Strategy
According to TCS, the layoffs are part of its plan to become a “future-ready organisation,” which includes:
- Large-scale AI deployment for clients and internal processes
- Entering new markets
- Deepening strategic partnerships
- Building next-generation infrastructure
- Workforce realignment
The company emphasised that reskilling and redeployment are underway, but employees whose roles cannot be reallocated will be released — primarily from middle and senior levels.
TCS Managing Director K Krithivasan attributed the cuts to “demand contraction” driven by ongoing macroeconomic and geopolitical instability. He ruled out double-digit revenue growth for FY26, noting that delays in client decision-making have intensified.
Karnataka’s Stand on IT Unions
Kharge clarified that Karnataka does not officially recognise IT sector unions but added that the government is responsible for addressing concerns raised by the public. The minister said the state’s focus is on ensuring that human resources remain employable in the evolving tech landscape, with a survey being conducted to identify actionable steps.
Global Layoffs Trend
The job cuts in India mirror a broader global trend. Microsoft has laid off over 15,000 employees in 2025, representing 7% of its workforce. Globally, over 80,000 tech workers have been laid off this year across 169 companies, according to Layoffs.fyi. In 2024, the figure was nearly 150,000.
Industry analysts link the trend to both economic slowdowns and the disruption caused by AI — which is automating certain roles while creating demand for new skills.
What’s Next
The Karnataka government’s AI workforce impact study may influence reskilling initiatives, hiring policies, and potentially even labour regulations. For now, the IT sector’s challenge is balancing technological transformation with employment stability.
