Context
Of late, Tata Consultancy Services (TCS) has announced plans to lay off around 12,200 employees, which is about 2% of its global workforce, during the financial year 2026. It has come under scrutiny for its revised Bench Policy.
What is the Bench Policy?
(i) The ‘Bench’ refers to employees who are not currently assigned to active, billable projects but remain on payroll. These individuals may be:
(a) Awaiting project allocation.
(b) Undergoing training.
(c) Transitioning between roles.
(ii) Large IT companies have historically maintained a sizable bench to ensure flexibility in responding to client demands.
(iii) The Nascent Information Technology Employees Senate (NITES) has formally complained to the Ministry of Labour and Employment, calling the policy ‘coercive’, ‘punitive’, and ‘inhumane’.
Key Reasons Behind the Change
(i) Cost-cutting: With global tech spending under pressure, companies are streamlining operations to lessen overhead. Largearge benches require huge expenses and are also inefficient in hard times.
(ii) Skill Mismatch & Redeployment Challenges: As AI, cloud, and cybersecurity are capturing AI delivery models, many employees ( specifically mid and senior roles ) face difficulty in adapting to each-heavy positions.
(iii) AI & Automation Impact: AI is comprehensively changing job roles. Entry-level tasks are automated, eliminating the requirement for large bench pools.
(iv) Product-Centric Delivery Models: IT firms are turning heads away from conventional project-based staffing to flexible, product-centric teams. It not only reduces reliance on bench capability but also requires incessant upskilling.
Reasons for the IT Sector Layoffs
(i) Shift in Delivery Models: Shift towards flexible, product-focused models, eliminating the requirement of traditional project managers. Also, the rising skill gap makes the issue of adaptation to AI, cloud, cybersecurity, and other emerging technologies worse.
(ii) Global Economic Uncertainty: Fluctuating global economy and silent client spending have led to cautious hiring and workforce cutting. Export-focused IT firms are more sensitive to global recessions and inflationary pressures.
(iii) Skill Misalignment: Rising mismatch between academic curricula and industry demands, especially in emerging tech like artificial intelligence and cybersecurity. Hardships in reskilling senior professionals for demanding roles due to cognitive stiffness and inadequate pragmatic exposure.
Repercussions of Layoffs in India’s IT Sector
(i) Employee Concerns: Increasing job insecurity is negatively impacting employee morale and mental state. The stringent regulations have resulted in stress, uncertainty, and the threat of termination. It gives rise to:
(a) A culture of fear and pressure.
(b) Psychological burden on benched employees.
(c) Decreased morale, especially among freshers and those in unnecessary roles.
(ii) Stress on Education & Career Pathways: The IT sector has always aided in ensuring upward mobility for engineering graduates.
(iii) Economic & Structural Challenges: Layoffs show deeper foundational issues in India’s economy, where quality employment isn’t at par with growth. The Bench Policy Reforms are decreasing the buffer workforce, giving rise to job instability.
(iv) Global Dependencies & Vulnerabilities: India’s IT firms are heavily dependent on export markets, especially the United States and Europe. Any issues at the global level(Global recessions, inflation, and tech budget cuts) will directly impact hiring and project volumes in India.
(v) Transparency & Fairness: Critics raise fingers at policies devoid of empathy, which may negatively affect freshers and mid-career professionals.
- Digital Sovereignty of India
- India’s Aviation Sector Demands Safety Measures
- India’s Criminal Justice System
- List of Top 5 NDA Coaching in India | Best NDA Coaching in India
Way Forward
(i) Reimagining Bench Policy with Empathy & Agility: Instead of inflexible limits (e.g., TCS’s 35-day rule), companies could go with tiered bench durations based on experience and skill relevance.
(ii) Investing in Scalable Upskilling: Focus on artificial intelligence, cybersecurity, cloud, and full-stack development. Government and edtech firms have to ensure subsidized training for displaced employees. Provide bonuses or fast-track promotions for employees who complete critical tech certifications.
(iii) Strengthening Labor Protections & Policy Reform: IT unions like NITES and FITE are urging the government to bring IT firms under the Industrial Disputes Act, ensuring due process in terminations, along with Grievance Redressal Mechanisms and Policy Dialogue.
(iv) Diversifying Employment Pathways: Global Capability Centres and tech startups are emerging as alternative job creators.
(v) Embracing a Human-Centric Tech Transition: IT must take account of the mental health of employees, ethical deployment of artificial intelligence, and, more importantly, ensure inclusive growth.
Conclusion
Artificial intelligence will alter the global economy irrespective of what we want or desire. India already enjoys a reputation as a disciplined, trusted technology hub. So, it is a positive point we can leverage to expand AI by investing in flexible rules on data and ethics, and positioning ourselves as a global centre for “responsible AI”.