Wipro, HCL Tech, Infosys Fall On TCS Job Cuts Buzz; But Why Midcap IT Stocks Are Rising?

Indian IT stocks reacted mixed to the TCS job cuts buzz on Monday, July 28, with Infosys, Wipro, HCL Tech and Tech Mahindra shares trading in red. However, the midcap IT stocks are unfazed despite concerns related to the large-cap companies' growth trajectory due to uncertain macro conditions.

Nifty IT Index:

At the time of writing, the Nifty IT index traded at 35,481, lower by 142.75 points or 0.40%. In the early trade, the index touched an intraday low of 35,049.90, recording at least a 573.85-point drop from the previous session's print of 35,623.75.

Large-Cap IT Stocks Falling:

Wipro took the biggest hit, nosediving by 3.5% on NSE. While Infosys plunged by 2.2%. TCS also declined by nearly 2%, followed by HCL Tech, which was down by 1.1%.

Stocks like Tech Mahindra and LTIMindtree tumbled nearly 1% each.

However, this was not the case with midcap IT stocks.

Why Midcap IT Stocks Are Rising:

Shares of Mphasis emerged as the top bull in the IT sector, skyrocketing by 4.5%. Coforge, Oracle Financial Services and Persistent Systems also climbed by 1% to 3%.

"The sharp cut in the IT index has been dragging the market down, and there is no respite in this in view of the 2% cut in its global workforce announced by TCS. However, midcap IT names hold promise in view of their strong growth prospects," said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

TCS Jobs Cut:

According to reports, Tata Group-backed TCS is likely to cut jobs by 2%, reducing its workforce by 12,000 employees in the financial year 2025-26.

In an interview with MoneyControl, TCS chief executive officer and managing director K Krithivasan said, "This is not because of AI giving some 20 per cent productivity gains. We are not doing that. This is driven by where there is a skill mismatch, or where we think that we have not been able to deploy someone."

He added in the interview that it is not because we need fewer people. We will continue to look for high-quality) talent, acquiring talent, and training talent. That continues to happen. This is more about where there is a feasibility of deployment.

During the April-June 2025 quarter, TCS added 6,071 employees on a year-on-year basis, taking its total headcount to 613,069 employees as of June 30, 2025. TCS's net addition is at 5,090 employees from the March 2025 quarter. TCS attrition rate rose mildly to 13.8% as of the June 2025 quarter, compared to a 13.3% rate as of the March 2025 quarter.

Earlier this month, during the Q1 results press briefing, TCS Milind Lakkad, Chief HR Officer, said, "Hiring shouldn't be connected to quarterly growth. Hiring is planned every year." His statement comes after he was asked about TCS reevaluating its stance on hiring 42,000 freshers for FY26.

That Time, Lakkad pointed out that TCS had hired aggressively initially, which resulted in some business challenges. He explained this has led to an imbalance, but "we are not that bothered as we will leverage this going forward."

Also, CEO K Krithivasan revealed the Tata tech giant is seeing a lot of pent-up demand, but the company is held back due to uncertain macroeconomic conditions.

Lastly, TCS has refrained from giving any clarity on its wage hike plan.