No Bailouts, No Excuses: How GOI Can Stop IT Layoffs Without Spending Billions
The numbers are staggering. TCS, India’s largest IT services company, reported a headcount drop of nearly 20,000 employees in just one quarter. Attrition has actually fallen, so these exits cannot be explained away as voluntary churn. Instead, they signal a deeper restructuring—one that threatens to set off ripples across India’s white-collar job market. And yet, the Government of India (GOI) maintains a studied silence, leaving lakhs of IT professionals to fend for themselves.
India has always prided itself on resisting the Western temptation of corporate bailouts. Unlike Washington, New Delhi has never cut blank cheques for failing airlines, collapsing banks, or crumbling tech giants. No Troubled Asset Relief Program, no $50 billion airline lifeline, no taxpayer-funded rescues of private firms. On one hand, this fiscal discipline has shielded India from the moral hazard of rewarding corporate mismanagement. On the other, it has left workers dangerously exposed when companies decide to “rightsize” in the name of efficiency.
But here’s the thing: saving jobs does not require bailouts. The GOI has plenty of tools at its disposal that can cushion workers without rewarding inefficiency. Take retention-linked EPF subsidies, for example. If companies like TCS commit to maintaining headcount above a baseline, the government can reimburse part of their provident fund contributions. Tie incentives to retention, not to balance sheets. Or consider training tax credits—if firms reskill and redeploy employees internally, they should get fiscal breaks. This would force companies to invest in people rather than discard them at the first whiff of automation.
Beyond tax tweaks, the government can actively create demand. Fast-tracked public digital projects—from cloud migration of ministries to cybersecurity upgrades in PSUs—could quickly absorb surplus bench strength. SME digitalization vouchers, redeemable only via IT service providers, would push much-needed projects into mid-tier firms while keeping larger players staffed. These are not handouts; they are targeted interventions that stimulate real economic activity.
The urgency cannot be overstated. IT is India’s largest white-collar employer and a critical source of foreign exchange. When TCS or HCLTech cuts thousands, the pain spreads well beyond Bengaluru or Pune. Entire ecosystems of startups, vendors, and ancillary services feel the squeeze. Families reliant on a single tech salary suddenly find themselves facing EMI defaults. The timing could not be worse: as the global industry pivots to AI and automation, India risks losing human capital it desperately needs for the transition.
Of course, support cannot come without accountability. Any incentive must be conditional. If companies take subsidies, they must show headcount stability. If they accept training credits, they must prove redeployment within a fixed window. The GOI should mandate quarterly workforce dashboards, published through MeitY or NSDC, showing hires, exits, and redeployments by skill cluster and city. Transparency is the only way to ensure this does not devolve into another form of corporate subsidy.
The GOI loves to boast about Digital India, AI summits, and India becoming the world’s back office. But what is the value of that narrative if the same government cannot protect its own IT workers from the chopping block? If India can design PLI schemes for semiconductors and mobile phones, why can’t it design retention-linked incentives for IT jobs?
Perhaps the government will wait until the next industry conference to announce yet another “Vision 2047” roadmap, while tens of thousands of engineers quietly update their Naukri profiles. Or maybe, just maybe, it could act now—crafting smarter policies that save jobs, protect human capital, and steady the IT sector without ever writing a bailout cheque. Because in today’s India, “business as usual” is not good enough when 20,000 livelihoods vanish in a single quarter.
