Job Security in Tech: TCS Layoffs as a Wake-Up Call

TCS’s decision to cut 12,000 jobs isn’t merely a corporate adjustment; it serves as a stark reminder of the shifting landscape of job security in the tech sector. In an article featured in the Economic Times, Dhirendra Kumar, CEO of Value Research, describes it as a “wake-up call” for many in India who have long held onto the belief that tech jobs are secure.

Understanding the Impact of Job Cuts

As India’s leading IT firm, TCS has always symbolised reliable employment. However, the company is now reducing its workforce by 2%, primarily affecting middle management roles. Kumar argues that the public backlash surrounding this decision overlooks a deeper issue. According to him, the tech sector had operated under a false sense of security for years, akin to government jobs, and this illusion has now crumbled.

Instability as a New Normal

Kumar does not shy away from addressing the harsh truths surrounding employment instability. He asserts that this instability is not a flaw but rather a fundamental aspect of the current system. He posits, “If a company like TCS fails to adapt to a changing world, it’ll be dead sooner rather than later.” Far from being an act of corporate cruelty, the layoffs are presented as necessary for remaining competitive.

The Financial Vulnerabilities of Workers

In his analysis, Kumar highlights that many Indian workers find themselves in precarious situations. This precariousness is not solely due to job reliance but also stems from a lack of financial preparedness. He states, “The biggest vulnerability middle-class families face isn’t low income—it’s massive fixed costs.” High equated monthly instalments (EMIs), credit card debt, and lifestyle inflation contribute to making any job loss a significant crisis.

The Story of a Tech Couple

Kumar shares an example of a tech couple whose professional lives were closely linked to the same industry. When the downturn struck, they faced the dual challenge of losing both careers. He remarks that they were not just financially under-diversified but had also neglected to diversify their lives.

Building Financial Resilience

According to Kumar, the path forward does not lie in denial or anger; rather, it involves taking proactive steps towards financial security. He advocates for developing “financial armor,” which includes having emergency funds, managing debt wisely, and spending flexibly. He warns, “If you spend 90% of your income, a layoff is disaster. At 60%, it’s inconvenience.”

Preparing for Future Challenges

TCS’s layoffs are merely the beginning of a larger trend. Kumar insists, “Rather than raging against market realities, build buffers to survive them.” In today’s fast-evolving economy, assuming that job security is guaranteed may indeed be the riskiest assumption of all.