Tata Consultancy Services’ (TCS) decision to lay off 2% of its workforce -- impacting over 12,000 employees -- could have ripple effects on India’s housing market, particularly in key tech cities such as Bengaluru and Pune. Industry experts warn that if other IT firms follow suit with workforce reductions, it may create uncertainty in the real estate market.
“There is no doubt that TCS is the de facto bellwether of the Indian IT industry, and we can expect uncertainty in the overall housing market if these layoffs do happen – especially if other IT majors follow suit. India’s IT sector significantly influences the housing sales market in India, particularly in key IT hubs such as Bengaluru, Hyderabad and Pune, where IT employees account for a sizeable share of mid-and high-value home sales,” Prashant Thakur, Regional Director & Head – Research & Advisory, ANAROCK Group told TNIE.
Thakur added that their contribution peaked between 2022 and early 2024, thanks to considerable IT employment spikes, salary increments, and the relocation trends seen after COVID-19. Even in the robust premium housing market, IT professionals contribute to demand.
Prestige Group, which has a strong presence on its home turf Bengaluru, however, does not see any major impact of TCS layoffs on housing demand.
“Today, significantly more jobs are being created in Bangalore and other IT hubs across the country in GCCs, tech start-ups, and other IT and AI-related organisations. In Bengaluru alone, more than 1.2 lakh jobs were created in 2024-25 in the tech sector, compared to the 12,000 job layoffs being done across the country by TCS,” Praveer Shrivastava, Sr. Executive VP, Residential, Prestige Group, told TNIE.
He added, “A record 79 million sq ft of office space was absorbed in India in 2024-25, with Bengaluru leading the list at 21.8 million sq ft. So economic activity and demand remain very strong. Demand for real estate is coming from across many segments including IT and as of now we don’t see any real impact coming out of the recent newsflow.”
However, the CEO of a Pune-based real estate firm expressed concern. “Demand from IT employees has slowed down in recent quarters due to stagnant wages in 2024. Layoffs on this scale could force working-class professionals across sectors to postpone major purchases,” the CEO said, requesting anonymity.
TCS on Sunday said the layoffs are part of the company's broader strategy to become a "future-ready organisation", focusing on investments in technology, AI deployment, market expansion, and workforce realignment.
The threat of further layoffs looms over the real estate sector as housing sales plummet. According to Anarock, sales dropped 20% YoY in Q2 CY25, with only 96,285 units sold compared to 120,335 in Q2 2024. Job market experts warn that AI could trigger massive job cuts across multiple sectors, exacerbating the downturn.
Thakur said the impending danger of job cuts can slow down growth in the housing market, at least over the short term, as employment insecurity and layoffs never bode well for residential demand.
“However, there are also other factors causing uncertainty and hesitancy, not least of all the ongoing geopolitical tensions, stock market slowdown, and the unresolved questions surrounding the tariff scenario. As a combined result, we may see more housing purchase decisions being put on hold in the key tech cities,” he said.
“That said, India’s strong economic fundamentals and Indians' baked-in sentiment towards home ownership will eventually cause demand to find its true north again,” added Thakur.