Understanding the Layoffs: Main Drivers
Across IT companies worldwide, recent layoffs stem from a convergence of economic pressures, AI transformation, and strategic restructuring:
- Firms overhired during the pandemic and are now downsizing to align workforce with post‑boom needs
- AI and automation have reduced demand for routine engineering and support roles; companies like Microsoft and IBM cite this shift in their restructuring plans
- Increasing global capital expenditure—particularly in AI infrastructure—has pressured firms to cut operational costs to maintain investor confidence
Country-Wise Snapshot: Layoffs by Region
India
- Tata Consultancy Services (TCS) cut approximately 12,000 jobs (2% of its workforce), mainly in mid- and senior-management layers, citing mismatch with skills required for AI adoption and lower export demand to North America
- Other IT services firms—Infosys, HCLTech, Wipro—cut a combined 10,000+ roles, particularly in automation-exposed functions. Startups also restructured: Gupshup (≈200 layoffs), Ola Electric (1,000+), Paytm (5,000–6,300), ShareChat, Pocket FM, Cult.fit, and Unacademy together affected tens of thousands
- However, Infosys bucked the trend by continuing to hire and prioritizing reskilling over layoffs
🇺🇸 USA
- Tech giants laid off tens of thousands: Microsoft (~9,000 jobs, ~4%), Intel up to 20% (~24,000 globally), Google and Amazon also trimmed staff in less strategic divisions
- Collectively, global tech layoffs surpassed 60,000 – 100,000 jobs in mid‑2025, with over 75,000 cut by May alone—across Alphabet, Microsoft, Amazon, Intel, IBM, Meta, CrowdStrike and others
🇪🇺 EU & MENA
- Several European tech firms—like Unbabel (Portugal, 25%) and Chrono24 (Germany, 24%)—announced restructuring tied to AI and operational shifts
- Intel also scaled back operations in Germany, Poland and Costa Rica, affecting thousands under global cost programs
🌍 South Asia (Outside India)
- Broader South Asian tech ecosystems mirrored India: emerging economies faced layoffs tied to shrinking investor funding, automation adoption, and overhiring built during previous growth cycles
Why Now? The Root Causes
| Driver | Explanation |
|---|---|
| AI & Automation | Companies cite AI efficiencies—replacing backend roles from support to product pipelines |
| Economic Slowdown | Rising global interest rates, inflation, and weaker enterprise tech budgets (especially in North America) reduce hiring appetite |
| Performance-Based Restructuring | Firms like Meta and Microsoft emphasize removing non-performers, flattening management, and focusing on strategic teams |
| Investor Pressure | Cost discipline favored by investors amid high infrastructure spend, especially in generative AI and cloud |
| Trump-era Trade Uncertainty (India-specific) | Tariffs and policy unpredictability dampened US client spending—impacting Indian exports and causing deal delays |
Strategic Insights for Industry Leaders
Embrace Workforce Reskilling & Role Transformation: Prioritize moving employees into AI-capable roles; Infosys exemplifies this with active recruitment and upskilling instead of layoffs
Avoid Overhiring in Boom Cycles: Build flexible staffing models to prevent bloated payrolls when growth curves flatten.
Develop AI-Efficiency with Human Nuance: Leverage AI tools strategically—without eliminating roles that embed domain knowledge and creativity.
Maintain Agile Operating Models: Avoid rigid pyramids; flatten structures for faster innovation, fewer layers, better synergy.
Diversify Client Concentration: Reduce reliance on one geography—unbalanced exposure to North America amplified India’s IT slowdown.
Transparent Communication Is Critical: Layoffs framed around long-term transformation—not panic—helps retain morale and minimize reputational damage.
Tech Industry Layoffs (2023–2025): Trends, Countries & Roles
Timeline & Layoff Volume by Year
| Year | Estimated Global Layoffs (Tech Sector) |
|---|---|
| 2023 | ~200,000 + (driven by large tech restructuring) |
| 2024 | ~238,000 globally across ~1,115 companies |
| 2025* | ~132,000 impacted so far; projected up to 235,000 if trend continues |
* So far (Jan–May/July range).
Countries with Highest Layoffs
- United States: ~95,000 laid off in 2024; continued large cuts to date in 2025
- India: Significant impact via major IT firms like TCS (≈12,000 jobs), plus cuts at Infosys / Wipro / startups tied to export slowdown and automation
- EU & MENA: Regional reductions particularly at global firms with operations in Germany, UK, Australia, India—e.g., Atlassian cut 150 roles in support/customer services across multiple countries
Role-Wise Layoff Breakdown by Volume & Impact
| Role / Function | Approx. % of Total Cuts | Details |
|---|---|---|
| Customer Support / Service | ~20–30% | Atlassian cut 150 support roles across AU/IN/US/UK despite denial of AI causation |
| Back‑office & Admin (HR, Finance) | ~10–20% | IBM targeted ~26,000 non-customer-facing roles; entry-level administrative positions were hit hardest |
| Engineering & Product Development | ~25–30% | Microsoft eliminated ~6,000 in May and ~9,000 in July 2025, across product teams including Xbox and enterprise |
| R&D & Data Roles | ~10–15% | Indeed / Glassdoor laid off ~1,300 roles in R&D, people and sustainability teams as part of HS operations streamlining |
| Sales & Marketing / Channel | ~5–10% | CrowdStrike cut ~500 roles (~5% of staff), focusing on back-office and channel operations |
| Other categories (contractors, etc.) | ~5–10% | Includes event tech, media, and startup closures (Zeen, Scale AI, etc.) |
Root Causes Behind Role-Wise Layoffs
- AI & Automation: Most affected functions include customer support, administrative, and data entry roles; yet companies often deny direct AI replacement even while citing efficiency gains
- Economic Restructuring: Legacy engineering/product teams trimmed for cost discipline, pivot toward cloud/AI priorities (e.g., Microsoft, Intel)
- Investor‑Driven Scaleback: R&D and strategic ops roles squeezed under pressure to optimize margins amid increased CapEx on AI infrastructure
Strategic Insights for Employers & Policy Makers
Functions most vulnerable: customer service, admin, non-core engineering roles
Countries with highest impact: USA, India, followed by EU / MENA regions
Year-on-year layoff volumes highlight a structural shift in tech workforce, not just cyclical downturn
Role survival depends on AI literacy, adaptability, and strategic function within evolving business models
Closing Thoughts
The 2025 wave of IT layoffs reflects a paradigm shift—not just a cost-cutting cycle, but an industry realignment toward AI-centric operational models, fiscal discipline, and structural efficiency. While painful, the transition offers lessons in resilience, adaptability, and strategic reinvention.
Organizations that proactively build hybrid human-AI workflows, emphasize learning and redeployment, and align talent structures with future innovation will be best positioned to lead in this new era.
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