MUMBAI / BENGALURU — The Indian IT services sector, a $250-billion pillar of the national economy, is facing its most significant existential threat in decades. Following the February 2026 launch of Anthropic’s Claude Cowork—an autonomous AI agent suite—the industry has undergone a violent market correction, wiping out over ₹2.5 lakh crore in valuation in a matter of days.
The sell-off, which intensified between February 11 and February 13, saw industry bellwether Tata Consultancy Services (TCS) slip below the critical ₹10 lakh crore market capitalization mark.
The Catalyst: From "Assistant" to "Agent"
The primary driver of investor panic is the shift from generative AI to agentic AI. While earlier models assisted humans, Anthropic’s new "digital coworkers" can independently execute multi-step workflows.
Autonomous Operations: Claude Cowork can autonomously handle legal research, contract triage, and SAP migrations—tasks that previously formed the high-margin "bread and butter" of offshore delivery centers.
The "Patil Effect": Anthropic CTO Rahul Patil, an alumnus of Bengaluru's PES University, is credited with making these agents "enterprise-ready," allowing them to bypass traditional SaaS platforms like Salesforce and ServiceNow.
Revenue Deflation: Analysts at Jefferies have termed this the "SaaSpocalypse," warning of a 30-40% revenue deflation as clients move from "headcount-based" billing to "outcome-based" AI subscriptions.
Market Carnage: A Sector in Red
The Nifty IT Index recorded its steepest decline since the 2020 pandemic era. As of February 15, 2026, the structural re-rating has hit major players hard:
| Company | Recent Low (Feb 2026) | Market Impact |
| TCS | ₹2,585 (5-Year Low) | Slipped below ₹10L Cr; overtaken by SBI in M-Cap. |
| Infosys | ₹1,397 | 8% single-day drop; 2,500+ GenAI projects failed to stem the slide. |
| Wipro | ~₹420 | Hit by heavy sell-offs in US ADRs. |
Workforce Transformation: 2026 Layoff Trends
The disruption is manifesting in a grim reality for the tech workforce. Reports indicate that over 30,000 tech jobs were cut globally in the first eight weeks of 2026, with India topping Asia’s list.
Entry-Level Freeze: Hiring for "routine" roles in coding, testing, and maintenance has effectively stalled.
The Skill Gap: While 1 million AI roles are expected by year-end, there is a 53% deficit in GenAI-ready talent.
Hiring Pivot: Companies like TCS and IBM are recasting entry-level roles, requiring "AI fluency" as a mandatory prerequisite for new engineers.
The Counter-Offensive: India Inc.’s AI Reset
Despite the "SaaSpocalypse" narrative, Indian IT leaders argue the sector is "successfully navigating" the transition.
TCS’s 5-Pillar Plan: The firm is embedding AI into 74% of its recent deals, pivoting toward AI-led consulting rather than simple labor arbitrage.
Integration Advantage: Industry veterans point out that 80% of Fortune 500 systems still require complex, human-led enterprise integration and governance that "black-box" AI cannot yet handle alone.
The Verdict: The February 2026 crash represents a structural reset. While the "manpower-heavy" model is dying, the future belongs to firms that can monetize AI outcomes.
