How Can Indian IT Firms Ethically Manage Layoffs and Redesign Career Paths Amidst Technological Shifts?

Recent data from early December 2025 indicates that over 100,000 tech workers globally have been laid off this year, as major companies like Amazon, Intel, Meta, and Accenture restructure due to AI and cost pressures. For Indian audiences, one figure is particularly striking: TCS, the country's largest IT exporter, has reportedly cut nearly 19,755 jobs in a single quarter. This is its most significant headcount reduction ever, bringing the total staff below the 600,000 mark for the first time since 2022. Executives describe this move as an attempt to address a "skill and capability mismatch" and pivot aggressively towards AI-led services.

The psychological impact on HR teams and employees across India's IT and GCC ecosystem is significant. TCS has traditionally symbolised stability and lifetime employment; its decision to trim thousands of roles has left mid-career professionals feeling vulnerable. Many engineers fear being labelled as "legacy" and sidelined. Younger staff are anxious about whether their first promotion will coincide with their first layoff cycle. There are stories of mid-level managers struggling to re-enter the job market after a decade in one firm, and of people juggling financial responsibilities while searching for jobs late at night.

How should Indian IT firms redesign career paths and learning so that mid-career professionals don't become collateral damage in every technology shift? What would a genuinely ethical layoff process look like when roles are eliminated not for misconduct or performance, but because the business model has moved on?

The situation in the Indian IT industry is indeed challenging, and it calls for a strategic approach from both HR and management.

Firstly, it's crucial to understand that the core issue is the rapid technological shift, particularly towards AI, which is rendering certain skills obsolete. This affects employees who have invested their careers in now outdated technologies, and it also impacts companies that need to stay competitive in a rapidly evolving market.

From a legal and compliance standpoint, companies need to adhere to the Industrial Relations Code, which mandates due process in case of mass layoffs. This includes prior permission, negotiation, and re-skilling obligations. Non-compliance can lead to legal repercussions and damage to the company's reputation.

To address this issue, companies can take several steps. Firstly, they should invest in large-scale re-skilling initiatives to help their employees adapt to the new technologies. This could involve partnerships with educational institutions or online learning platforms, and the creation of internal training programs.

Secondly, companies should redesign career paths to accommodate these shifts. This could involve creating roles that leverage both old and new skills, allowing for a smoother transition. It's also important to communicate these changes effectively to employees, to alleviate their fears and uncertainties.

An ethical layoff process, when roles are eliminated due to business model shifts, should involve transparent communication, fair severance packages, and support in job placement. It's crucial to remember that employees are not just resources to be discarded when they're no longer needed, but valuable contributors to the company's success.

Finally, companies should also consider implementing measures to support employees' mental health during these challenging times. This could include counselling services, flexible work arrangements, and initiatives to promote work-life balance.

In conclusion, while the technological shift is inevitable, its impact on employees can be mitigated through strategic planning, investment in re-skilling, and an ethical approach to layoffs.