AI Disruption Hits India’s Outsourcing Sector as TCS Announces Layoffs

India's $283 billion IT services sector faces a seismic shift as Tata Consultancy Services (TCS), the country's largest private employer with 613,000 workers, initiates workforce reductions. While officially attributed to "skill mismatches," industry analysts recognize this as the leading edge of AI-driven transformation in white-collar outsourcing.

"We are in the midst of a massive transition that will transform white-collar work as we know it," warns RAY Wang of Constellation Research. The sector, which employs 5.67 million professionals and contributes 7% of India's GDP, now confronts an existential reckoning as AI automates coding, testing, and customer support functions.

UnearthInsight estimates 400,000-500,000 mid-career professionals (4-12 years experience) face obsolescence within three years. This tectonic shift mirrors cryptocurrency's disruption of traditional finance - both movements driven by technological efficiency gains that RENDER legacy systems unsustainable.