Archive · 4 Nov 2025
Shashi Tharoor Warns of 5 Lakh IT Jobs at Risk in India
Imagine India's IT companies used to be like a big factory that hired lots of people to do simple coding jobs for companies around the world.
This worked well for a long time, making a lot of money.
But now, new smart computer programs, like AI, can do many of those simple jobs much faster and better.
This means the companies don't need as many workers, especially in the middle and senior levels.
So, a politician named Shashi Tharoor is warning that up to 500,000 IT jobs could be in danger.
He says the old way of doing business is 'obsolete,' and companies now want fewer workers who are super skilled in new technologies like AI.
This is also making it harder for new engineering graduates to find jobs because they need to learn these advanced skills, not just basic coding.
Some big companies in the US, like Amazon and Meta, have already laid off many people, and TCS in India is also cutting staff.
Shashi Tharoor warns that approximately 500,000 IT jobs in India could be at risk by the end of the fiscal year.
Over 200,000 IT job layoffs have reportedly occurred in 2025, impacting mid- and senior-management roles.
The traditional IT service export model, based on staffing engineers and currency arbitrage, is becoming obsolete.
AI, machine learning, and RPA are driving new business models that reduce the need for large workforces.
India's engineering graduates face challenges due to a skill mismatch, requiring overhauling curricula to include AI, cloud computing, and product thinking.
- Who
- Shashi Tharoor, Indian IT sector professionals, IT companies (TCS, Amazon, Meta), engineering graduates
- What
- Warning of significant job risks in the Indian IT sector due to the obsolescence of traditional business models and the rise of AI-driven automation.
- When
- By the end of the current fiscal year; layoffs have already occurred in 2025.
- Where
- India's IT sector, with impacts also noted in the US.
- Why
- The traditional outsourcing model is fading, replaced by AI and automation, reduced client budgets, and a shift towards specialized expertise and leaner teams.
Traditional IT Business Model
AI-Driven IT Business Model
Core Business Model
Traditional IT Business Model
The traditional model relied on staffing engineers for global software projects, earning margins from currency arbitrage, and operating a 'digital assembly line' with basic coding skills.
AI-Driven IT Business Model
The new model emphasizes AI-led automation, machine learning, RPA, high-value innovation, specialized expertise, lean teams, and AI fluency, shifting from basic coding to complex solutions like cloud-native architectures, cybersecurity, and generative AI.
Headcount and Hiring
Traditional IT Business Model
Revenue growth was directly proportional to adding headcount, with demand for large numbers of engineers, including campus recruits.
AI-Driven IT Business Model
AI and automation reduce headcount needs, leading to targeted layoffs in mid- and senior-management, delivery roles, and developer positions. Clients prefer leaner teams and fewer people who can do more.
Client Expectations and Billing
Traditional IT Business Model
Clients required 'armies of coders' and were billed based on staffing engineers for projects.
AI-Driven IT Business Model
Clients now want solutions, specialized expertise, and AI fluency, leading to a shift towards outcome-based project delivery and reduced IT spending due to economic uncertainty.
Impact on Graduates
Traditional IT Business Model
A large number of annual engineering graduates could find opportunities in the traditional model.
AI-Driven IT Business Model
There is a skill mismatch, as outdated pedagogy in engineering colleges does not equip graduates with necessary AI, cloud computing, blockchain, and product thinking skills required by the evolving industry.
- Potential Jobs at Risk
- 500,000 (according to Shashi Tharoor)
- Layoffs in 2025 (estimated)
- Over 200,000
- Companies Mentioned (US)
- Amazon (14,000 layoffs), Meta (8,000 layoffs)
- TCS Layoff Percentage
- 3.2%
- Annual Engineering Graduates in India
- 400,000
- Skills Needed
- AI, cloud computing, blockchain, product thinking, cybersecurity, generative AI