Moneycontrol Pro Panorama | The big squeeze in IT jobs

Workers in the IT services industry are already facing a heightened risk of unemployment.

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Even as the latest H1B visa restrictions threaten to stall future employment migration to the US, workers in the IT services industry are already facing a heightened risk of unemployment. Accenture, a global IT services company with a large workforce in India, relieved 11,419 workers in the quarter ending August 2025. This is the second consecutive quarter that Accenture has reduced its workforce by more than 10,000.

Cumulatively, Accenture reduced its workforce by 2.7 percent or 21,826 employees from February 2025. This is more than TCS' figure of 2 percent or 12,000 employees that it plans to let go this year. Separately, HCL Technologies has said in its Q1 earnings call that it plans to execute a restructuring programme on both people and non-people side. HCL’s workforce dropped slightly and expectations are that the company will see sizeable restructuring costs in Q2 of the current fiscal.

Such large restructuring programmes are unheard of in recent years (post-COVID) in the IT sector. Many fear companies are driving deeper changes in their employee pyramids aiming to reduce senior and mid-level workers. “Restructuring costs for a third year going into FY26 for Accenture indicates problems with reskilling a large workforce. Something we see impacting Indian companies too,” analysts at BOB Capital Markets said in a note. Accenture follows September-August fiscal year.

Experienced workers generally find work in other organisations. But the fear now is their existing skills are no longer in demand.

Retrenchment of such large number of employees can have a notable impact on the local economy. One, it underlines the dim view that companies have about near-term growth prospects, implying muted earnings. Second, the restructurings will have a significant impact on consumption. Note that senior and mid-level employees get paid handsomely in the IT sector.

The impact of a spending slowdown is partly visible in certain property markets, even though market share gains by listed real estate companies mask underlying trends. Recent GST rate cuts and festival-related purchases can boost near-term numbers. But investors should look at longer period data.

Pertinently, Accenture’s revenue guidance for the fiscal year beginning September 2025 does not indicate any improvement in revenue growth rates. With companies across the board rationalising costs, the outlook for IT sector employment remains challenging.

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