India’s real estate sector is grappling with the aftershocks of Tata Consultancy Services’ decision to lay off over 12,000 employees – roughly 2% of its global workforce. The announcement led to a sharp erosion in TCS’s market value within 24 hours and triggered broader tremors across the equity and property markets.
The downsizing has ignited fears of a cascading impact: spooked investors pulling out of real estate stocks, lenders tightening credit norms, and developers pausing or revising residential project launches. In IT-dependent markets, particularly Bengaluru, Pune, and Hyderabad, concerns are mounting that a glut of vacant homes and delayed occupancy could lead to what some are calling “ghost towers.”
On Dalal Street, real estate counters bore the immediate brunt. The Nifty Realty Index sank over 4% following the layoff news, with key players like Lodha Developers, Godrej Properties, Brigade Enterprises, and DLF seeing their stocks slide between 4% and 6%. Though earnings misses played a role, analysts agree that the sharp cuts in the IT sector significantly weighed down sentiment.
Housing demand in India’s tech hubs, long driven by steady employment in IT and ITeS sectors, is now under pressure. Mid-career professionals, typically in their 30s and 40s, represent a major chunk of residential buyers. Many carry substantial EMIs and had previously relied on predictable career growth and stable incomes. With job security suddenly in question, the segment’s appetite for new home purchases is cooling.
Developers, especially those catering to the mid-income and premium segments, are moving cautiously. Industry sources suggest that several launches originally planned for the second half of 2025 are now being delayed, as firms assess absorption capacity and buyer sentiment.
Early signs of stress are emerging in the rental market, with Bengaluru’s Whitefield and Electronic City seeing softening rents and rising vacancies, as online forums reflect growing anxiety among landlords and tenants amid an oversupply of rental units.
Lenders, meanwhile, are adjusting their risk models. Several banks and housing finance companies are tightening scrutiny on loan applicants from the IT sector. Though there has been no official tightening of norms, insiders suggest that applicants from firms undergoing restructuring are facing longer approval times and more documentation requirements.
The bigger fear is an overhang of unsold inventory. According to data from property analytics firms, Bengaluru alone had over 70,000 unsold units at the end of Q2 2025. If buying slows while launches continue, or even if they merely plateau, developers could be left holding more inventory than the market can digest, leading to capital strain and project delays.
Short Term Hitch No Long-Term Impact
Experts suggest that the 12,000 job cuts, representing about 2% of TCS's workforce, are unlikely to cause a major slowdown in office leasing or housing demand. The growth in other areas like Global Capability Centers (GCCs) and startups, could absorb some of the impact in tech cities which could help offset any negative impact from TCS layoffs.
Despite the layoffs, housing demand from listed developers remains stable, with average home prices holding steady. Industry bodies like CREDAI are downplaying the concerns, framing the downturn as a temporary, cyclical correction. They point to previous IT slowdowns that were followed by demand rebounds.
Select developers are already offering flexible payment plans and promotional offers to attract fence-sitting buyers. Meanwhile, some investors see an opportunity to pick up premium assets at discounted rates, expecting the market to recover once sentiment stabilizes.
The short-term outlook remains clouded and it may take a few quarters to fully assess the long-term impact of the layoffs on the real estate market. However, the real estate market's performance is also influenced by other factors like economic growth, interest rates, and overall business sentiment
