Indian IT Sector Faces Uncertain Future Amid US Tariffs and Workforce Changes
The Indian IT services sector is dealing with the ripple effects of new US tariffs and economic uncertainty. Rising input costs may lead US firms to cut back on tech spending. TCS plans layoffs as part of a broader strategy to adapt to market and workforce changes.
- Country:
- India
In the wake of newly-announced 25 percent US tariffs, the Indian IT services sector braces for indirect consequences, as industry experts predict potential cutbacks in discretionary technology spending by affected US companies. While the sector isn't immediately impacted, the rising input costs could carry significant repercussions, industry-watchers warned.
Nitin Bhatt, Technology Sector Leader at EY India, highlighted the growing concern around workforce mobility and evolving digital taxation frameworks. Companies that embrace hybrid service delivery, geographic diversification, and AI integration are expected to navigate global uncertainties more effectively.
Meanwhile, industry giant TCS has announced plans to dismiss over 12,000 employees, equivalent to two percent of its workforce, as part of a strategic overhaul. This move aims to make the company 'future-ready' by focusing on technology investments and market expansion amidst a backdrop of sluggish revenue growth and delayed client decision-making.
(With inputs from agencies.)
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