GREENVISSAGE EXPLAINS: IS THIS THE END OF THE INDIAN IT DREAM?
India’s USD 250 billion IT services industry is at a pivotal juncture. Once a bastion of job security and economic promise, companies like TCS, Infosys, and HCL are now showing signs of fatigue amid global tech disruption. In July 2025, Tata Consultancy Services, the country’s largest IT exporter, shook markets and employees alike with the announcement of up to 12,000 job cuts. For a company long associated with conservative management and near-lifetime employment, this was more than just a restructuring; it was symbolic. While the company said the layoffs stemmed from a skill mismatch, rather than AI-driven redundancies, the timing couldn’t be more telling. TCS’s workforce had expanded by over 36% since 2020, while revenue per employee grew at less than half that pace. As per reports, the layoffs are expected to help trim operating costs by nearly 4%, which equates to around 12% of the company’s projected net profit in fiscal year 2025. Simultaneously, the firm has frozen lateral hiring and held off on salary hikes, making the climate feel less like a blip and more like a reset.
Other Indian IT majors haven’t been spared either. Infosys onboarded just 210 freshers in the previous quarter, down sharply from thousands in prior years. HCL Technologies, meanwhile, offered junior staff a token raise of 1–4% while keeping senior pay hikes on hold. The pattern is clear: India’s largest tech employers are shrinking in both workforce and compensation, even as demand for newer skills surges. The often-blamed culprit is automation. Tools powered by artificial intelligence are now capable of generating production-grade code, managing cloud deployments, and even handling support tickets. Many mid-level roles in operations, infrastructure, and maintenance, once the bread and butter of Indian outsourcing, are being either automated or offshored to cheaper destinations like Vietnam, Mexico, or the Philippines. But this shift goes deeper than just technology.
A structural evolution is underway, led by the quiet rise of Global Capability Centres (GCCs). These are in-house engineering and operations units established by multinational corporations within India. Instead of outsourcing work to TCS or Infosys, companies like Microsoft, Amazon, and McDonald’s are hiring their engineers in Bengaluru, Pune, and Hyderabad, managing everything from SAP upgrades to AI modelling directly. The appeal is obvious. With GCCs, global companies gain end-to-end control, avoid vendor-related delays, maintain tighter data governance, and build domain-specific expertise in-house. And perhaps most importantly, they do so under their banner, something that helps attract top-tier talent more easily than traditional outsourcing firms. It’s one thing to work for a vendor, and quite another to work directly for Google or BCG, even if the job responsibilities are identical.
In the fiscal year 2024, GCCs in India grew by a staggering 40% in scale and headcount, even as traditional service-based IT firms grew by under 5%. This trend has only accelerated in 2025. Today, India is home to over 1,700 GCCs employing nearly two million people. Once known for cost savings, these centres are increasingly driving R&D, product innovation, and even global strategy. Some analysts project that the GCC industry could generate over USD 100 billion in revenue by the end of the decade. This has created a squeeze. On one side, AI and process automation are eating into low- and mid-tier service roles. On the other hand, clients who once relied on Indian IT vendors are building their delivery centres in India. The traditional IT service model, built on billing hours and moving talent across projects, is rapidly losing relevance.
It’s no surprise, then, that some critics have labelled Indian IT giants as glorified HR firms. This may be an exaggeration, but it captures the essential problem: these firms do not own intellectual property. They rarely build products. Instead, they deliver services based on human time and effort, a model that’s increasingly out of sync with a world where machines can work around the clock without error or salary. Yet, it’s not all doom. There are companies within India that are showing the way forward. Zoho, the Chennai-based software company, has built a fully integrated suite of business tools without any venture capital funding. It owns its product stack, its hosting infrastructure, and most importantly, its customers. It doesn’t bill by the hour. It bills by value. The future will belong to those who can create, not just deliver.
