In recent years, the tech industry has seen waves of mass layoffs, driven by shifting market demands and economic uncertainty.  IT major Tata Consultancy Services (TCS) recently announced that it would release 2% of its global workforce — amounting to more than 12,000 employees. Other IT companies too, have made similar moves in the recent past.

While these layoffs affect workers across age groups, young employees – many of whom are early in their careers – face unique mental health challenges. 

For early-career employees, the loss of a job is not just a financial setback but also a blow to their identity, confidence, and future aspirations. The instability that a layoff causes can lead to increased levels of anxiety, depression, and self-doubt, particularly as they navigate a highly competitive job market. Understanding the psychological toll of these layoffs is crucial to building more resilient support systems, both within the industry and in society at large.

Not just individual impact

Director of the National Institute of Mental Health and Neuro Sciences (NIMHANS) Pratima Murthy says that the IT industry boom that attracted young people with aspirations and promises of a better life – financially and socially – has resulted in migration from smaller towns as well as rural areas, into urban centres. “History suggests that when jobs are scarce or people lose jobs, the loss of income does not impact just the individual but also families back home who are often dependent on that individual. This has a snowballing effect financially on their loan EMIs for instance, and their planned investments. Losing one’s job, that too suddenly, can be very distressing,” she says.

While common emotional reactions include shock, disbelief, sadness, a sense of futility and unfairness, relationships can also be seriously impacted, especially when these have been initiated in the context of the workplace. 

“There is additionally an emotional consequence, where a sense of loss of face, loss of confidence and a sense of being let down as well as letting down the family may ensue. A sense of shame and difficulty in facing the family may result in concealing the reality of the situation, aggravating the stress. Such stress can trigger a grief response as well as anxiety or depression,” Dr. Murthy explains. 

Negative consequences

Excessive substance abuse is a well known response to stress, further aggravating the situation. “In an ideal world, protection of jobs would insulate professionals from all such consequences. Some ways of mitigation are to provide support to such employees, for more open communication with families, counselling for alternative job placements and for problem resolution. These are all very important, especially for emotionally vulnerable persons so that they do not feel that this is the end of the road, but develop the resilience to begin anew,” she points out.

Paulomi M. Sudhir, professor and consultant at the behavioural medicine unit, department of clinical psychology at NIMHANS, says mass layoffs are likely to contribute to feelings of uncertainty, demoralisation, a sense of unfairness and anger at the loss. “In some it may result in experiences of anxiety, sadness, hopelessness and helplessness especially when they are unprepared for the layoff and have commitments to fulfill, or have been solely supporting families,” she says.

Existing pressure

On an average, the work duration in IT and ITeS ranges from 10 to 11 hours and could go up to 12 hours in startups. With announcements of layoffs, employees report anxiety levels hitting a peak.  

“There is already stress due to work pressure, which forces you to work long hours on weekdays and even on weekends. On top of that, now the layoff announcements have caused severe anxiety for many of us to the extent that it is affecting our daily lives,” says a mid-management level employee at a leading ITeS company.  

A female project manager at the Bengaluru office of a global technology and service supplier notes how problems like depression are common among employees. “An emotional intelligence trainer employed by our own company, during her training session recently, mentioned how mild to medium depression is common among IT employees. The odd work hours affect our sleep cycle, create hormonal issues and induce depression symptoms,” she notes. She goes on to add how women feel the pinch more as they face the same workload as men at the office and an additional burden at home due to household work and childcare, in patriarchal family systems. 

Stigma in seeking help

Doctors say stigma surrounding mental health continues to be a major barrier to help-seeking behaviour, especially among laid-off IT employees who often face unique psychological stressors. Stigma further contributes to low morale, motivation and guilt. 

Although the sudden loss of employment can trigger anxiety, depression, and feelings of inadequacy, many hesitate to seek professional support due to fears of being perceived as weak or unemployable in future roles, doctors say. 

Cultural expectations of resilience, particularly in tech environments that value productivity and self-reliance, further discourage open conversations about mental well-being. As a result, stigma not only delays recovery but also perpetuates isolation, preventing individuals from accessing critical mental health resources during a vulnerable period. Addressing these barriers through workplace education, peer support systems, and normalised mental health discourse is essential for promoting healing and reintegration into the workforce.

The role companies must play

Asserting the importance of staying connected, Dr. Sudhir says seeking social support instead of isolation, continuing self care and using adaptive coping strategies are important at such times. She also points out that corporate mental health programmes in supporting employees during layoffs can be helpful – if the organisation involves them in preparing employees, offering mental health support and in staying connected. 

“Although businesses may have their own challenges, wherever possible, team leads, managers and other senior members should be available to offer support, in preparation for such situations and to also check particularly on those who are vulnerable (those with pre-existing mental or physical health issues, social concerns),” she says.

The response from companies however continues to be less than optimal: employees feel that companies are barely taking any steps to address their mental health concerns. “They ask us to inhale and exhale,” scoffs one employee. While most big IT and ITeS companies provide in-house counsellors and occasionally conduct mental health workshops, employees say that the root cause of the problems is still left unaddressed. Without systemic changes brought in through, perhaps, stricter labour laws by the government and other measures, improvements will not be seen anytime soon, they say.

(With inputs from Shilpa Elizabeth)

Published – August 05, 2025 03:31 pm IST