GLOSSARY: No More ‘Kitney Aadmi The?’ for Indian IT

No More 'Kitney Aadmi The?' for Indian IT

THE BELAMY

Weekly Newsletter of AIM

Monday, AUG 04, 2025 | By Amit Raja Naik

When TCS announced the largest layoff in its history, cutting 12,000 mid and senior-level employees, it wasn't just a cost-cutting exercise; it was a bold statement. Quoting the iconic Sholay, former Tech Mahindra chief CP Gurnani said, "Kitney aadmi the?... Thank God that period will be over", signalling the death knell of the headcount game in Indian IT.

Meanwhile, industry veterans like Mohandas Pai are calling this "a betrayal of people-first principles."

India's $250 billion IT services industry, long celebrated for its sheer scale of manpower, is now finally rewriting the rulebook. The focus is moving from scale to efficiency, from benches to billables, and from the pyramid structure to platform-based models. TCS has become the first to pull the lever—clean cut, Gabbar style.

Efficiency: The New Growth Strategy

The news of TCS letting go of 12,000 employees, roughly 2% of its workforce, has shaken up the industry, hitting mid-level managers, benchwarmers, and staff tied to an outdated project delivery model the hardest. "This isn't because AI is giving us 20% productivity gains. It's about skill mismatch and redeployability," TCS chief K Krithivasan clarified.

That nuance matters. Meanwhile, in sharp contrast, Infosys announced that it is hiring 20,000 freshers this year. Capgemini is going even further, targeting to hire up to 45,000.

While mid-senior roles face the heat, Indian IT firms are doubling down on fresh talent, with plans to hire over 85,000 in FY26 alone.

But here's what's really stood out: after the TCS layoff bombshell, many Indian IT firms seemed to adjust their public tone.

Just days later, Infosys shifted gears, with CEO Salil Parekh reinforcing the firm's utilisation metrics and internal AI upskilling push.

Moreover, HCLTech, which had previously remained vague about its workforce strategy, has now confirmed a formal workforce reduction as part of a sweeping organisational restructuring.

Wipro, while silent publicly, reported the steepest headcount reduction among India's top four IT firms, cutting 25,200 jobs since 2023 and recorded the highest attrition rate at 15.1% as of June.

What TCS did wasn't an isolated move; it set the tone. Everyone else, for the lack of a better word, was left simply scrambling.

The sector-wide silence speaks volumes, especially as stocks continue to tumble. The Nifty IT index is down nearly 18% year-to-date. TCS has slipped around 21%, Infosys about 20%, HCLTech roughly 23.5% and Wipro almost 18%, a reflection of deepening investor unease, despite relatively stable Q1 FY26 earnings.

A Cracked Pyramid

Let's be honest. The traditional Indian IT model, with its pyramid structure, body shopping and billable hours, was built for scale, not agility. Now, however, AI is unbundling that very foundation.

TCS, for instance, has rolled out a strict new bench policy, allowing just 35 unbillable days per year. Those who aren't placed on active projects face career stagnation or even exit. While the company frames this as a step towards "future-proofing", tech employee union Nascent IT Employees Senate has already filed a formal complaint alleging illegal retrenchment.

A $250 Bn Sector Under Pressure

From the outside, Indian IT still looks robust. But inside, cracks are beginning to show.

Over the last two years, India's top five IT firms have let go of 56,000 employees. Revenue per employee has stagnated, hovering between $45,000 and $55,000 for most Tier-1 firms. Client budgets are tight. AI-led promises are real, but modest. Infosys estimates productivity gains at just 5–15%. Meanwhile, Western clients are demanding 20–30% price cuts.

Global Signals, Local Impact

Since 2023, tech companies have laid off over 5,00,000 workers globally, according to Layoffs.fyi. From Microsoft to Meta, the mantra is the same: fewer people, more productivity.

Indian IT can't copy-paste that model. Billable hours still anchor revenue. However, the pressure to optimise is real. "Even Big Tech is on a CAPEX binge. $560 billion spent on AI infra between 2022–24," investor Hemant Mohapatra noted. "It's about owning the cost per token. AI is the last employee."

The contrast becomes even sharper when we consider revenue per employee. While TCS earns around $49,390 per employee annually, Accenture makes nearly 70% more, and Microsoft crosses $1.24 million per head. That's not just a valuation gap, it's a value creation gap.

As AI and automation compress project timelines and shrink the need for manual effort, the traditional model of growing through headcount is turning from strength to bottleneck.

Notably, mid-size IT firms like Coforge, Persistent and L&T Technology Services are pulling ahead with aggressive AI-led strategies, delivering double-digit growth and winning large deals. Meanwhile, the big four are grappling with sluggish performance and growing employee unrest.

A Wake-Up Call on Innovation

Despite generating over ₹50,000 crore in cash flow, TCS spends ~0.5% on R&D, Microsoft spends over 12%, while Meta and Alphabet spend even more.

This isn't just a layoff story; it's a wake-up call. The question that remains is whether our IT giants can adapt faster than the world moves. In this new game, efficiency beats headcount.

Genpact told AIM it is moving beyond the traditional headcount-based model to an outcome-driven, agentic AI-led approach.

If you found this newsletter insightful, share it with a friend, a colleague or that one person who still believes Indian IT can scale just by adding people.

And if you haven't subscribed to our AIM Tv channel yet, now's a good time. We break down the world of tech and AI in real time—crisp, clear and always ahead of the curve.

While you are at it, here's a quick look at some of the top stories of the week.

When a Nobel Laureate says he's "very depressed" about India's scientific progress, you listen. Despite India's booming economy, R&D investment has dropped from 0.8% to 0.64% of GDP over the last decade, prompting David Gross to tell AIM: "India had many advantages that China didn't have...I must say I'm disappointed."

While one side opens up to show strength, the other stays closed to stay in control. China is going open source in AI to assert innovation and scale influence globally, while the US treats openness as a strategic liability.

Why write a 20-page document when you can just build the damn thing? From Google's Gemini team to AI-first startups, teams are ditching lengthy PRDs for quick demos, ushering in a "vibe coding" culture where prototyping, not paperwork, drives clarity, speed and collaboration.

Now, let's explore some exciting collaborations and exclusive insights from the AIM ecosystem, brought to you with a unique twist outside our standard editorial content.

From Pilots to Platforms: Why GBS Needs a Rethink

Most GBS and GCC teams are still stuck in siloed AI experiments, lacking the unified platforms needed to scale. A new EdgeVerve–SSON report explains why moving beyond fragmented tools to an integrated, agentic AI approach is key to driving enterprise-wide transformation. Read the full report here.

Top 25 GCC Leaders Powering India's Innovation Economy

From redefining enterprise tech to building future-ready teams, these 25 leaders are shaping the next chapter of India's Global Capability Centres (GCCs). Check out the full list to see who's driving the transformation.

[Webinar Alert] Agentic AI, Data Management & GCCs

AIM Research is hosting 'Agentic AI, Data Management & GCCs' webinar on August 6, 2025 (India Edition) and August 7, 2025 (US Edition), exclusively for CXOs, industry leaders and AI and ML practitioners. Register now.

[Watch Now] Lt Gen (Dr) VJ Sundaram, the pioneer of India's missile program, shares untold stories of indigenous defence innovation in this exclusive Point Break episode.