Laid Off in India: What You're Actually Owed (2026)

The meeting is short. There is usually a second person on the call whose name you do not recognise, a sentence with the word “role” in it rather than the word “you”, and then a document arrives by email while you are still working out what just happened.

What happens over the following week decides more money than anything you will negotiate for the rest of the year. Not because the amounts are enormous, but because almost nobody knows which parts of an Indian severance package are a legal floor and which parts are simply what HR decided to put on the table — and the two are treated identically in the letter you are asked to sign.

Nobody knows how many people this is happening to

It is worth starting here, because the honest answer is unusual. India publishes no official layoff statistics. Companies are not required to disclose them, the notices employers must serve on the government under the labour codes are not aggregated into anything public, and the numbers that circulate in the press are estimates produced by staffing firms from their own placement data.

Those estimates are worth reading as estimates. Staffing firm TeamLease put Indian IT losses at 10,000 to 15,000 professionals through “silent” layoffs by May 2026; CIEL HR Services put it near 12,000 over roughly the same window; sector projections for the full year run to 25,000–35,000. Treat all of these as directional. They are the best available information and they are not a count.

The one thing that is documented is what happened at scale in the summer of 2025, when TCS announced it would cut around 12,000 roles — about 2% of its workforce — and the response made the legal questions visible in a way they usually aren't. Karnataka's labour department sought an explanation from the company. The Karnataka State IT/ITeS Employees Union filed an industrial dispute alleging the company had not obtained the prior government approval that large-scale retrenchment requires. The IT ministry said it was watching. That episode is the reason the rest of this page is worth reading: it established that these provisions are not theoretical.

The one word that decides everything

India's retrenchment protections do not apply to employees. They apply to workers, and that is a defined term with two carve-outs.

Under the Industrial Relations Code, a worker is anyone employed to do manual, unskilled, skilled, technical, operational, clerical or supervisory work. Excluded are people employed in a managerial or administrative capacity, at any salary, and supervisory staff earning more than ₹18,000 a month — a threshold raised from ₹10,000 by the codes, and still low enough that every white-collar supervisor in the country clears it.

Two things follow from this that people get wrong in opposite directions. The first is that being senior and well paid does not remove your protection: there is no salary ceiling for individual contributors, and “technical” is named in the definition rather than carved out of it, so a highly paid engineer with no reports is very plausibly a worker. The second is that a managerial title does not remove it either. What matters is function, and tribunals have repeatedly held that someone called a manager who cannot hire, fire, sanction spending or bind the company is still a worker. Job titles in Indian tech inflate for retention reasons; the inflation does not transfer to the statute.

What the floor is, if it applies to you

Four separate entitlements, from three different statutes, which is why they are so easy to bundle into one number and present as generosity.

The third row is the one worth pausing on. The worker re-skilling fund is genuinely new, created by section 83 of the code, and almost nobody claims it. Your employer contributes fifteen days of your last-drawn wages for every retrenched worker, and the fund credits that amount to your own account within forty-five days. It sits on top of your retrenchment compensation rather than inside it. If it does not appear as a line in your settlement, that is a question worth asking in writing.

The trap that costs the most

Everything above is triggered by retrenchment — a termination by your employer. None of it is triggered by a resignation.

So when a company facing a headcount reduction asks people to resign voluntarily, or offers a “mutual separation”, or presents a resignation letter as the tidier option that will look better in your record, understand what is being requested. Signing it removes the section 70 compensation, the section 83 credit, and the ₹5 lakh tax exemption under section 10(10B) — which is itself conditioned on being retrenched — in a single stroke. It also removes the basis for any later challenge, because you left.

This is not an accusation of bad faith; it is simply cheaper and administratively cleaner for the employer, which is enough to explain how common it is. The union complaints in the 2025 TCS episode centred on precisely this allegation — that people had been pushed to resign rather than retrenched. The right response is not confrontation. It is a written request for a termination letter that uses the word retrenchment, and a refusal to sign anything in the room where it is handed to you.

Did they need permission?

Under Chapter X of the code, an industrial establishment with 300 or more workers needs prior permission from the appropriate government before it can retrench a worker at all. The threshold was 100 under the old law; the codes raised it to 300, which removed a large population of mid-sized employers from the approval regime entirely. Below the threshold the employer only has to serve notice on the government, not ask it.

Above it, permission is a real precondition, and a retrenchment carried out without one is open to challenge — which is exactly the argument the Karnataka IT employees' union ran in 2025. You are unlikely to litigate this personally, and this page is not suggesting you should. But asking, in writing, whether the required permission was obtained is free, and it changes the tone of a settlement negotiation considerably.

One sector-specific note, since it is widely misreported. Karnataka has exempted IT, ITeS and related knowledge industries from the Industrial Employment (Standing Orders) Act, extended in June 2024 to run to 2029. That exemption removes the requirement to frame certified standing orders. It is not an exemption from retrenchment compensation, which sits in a different statute. It still weakens your position in practice, because standing orders are what would otherwise pin down the termination procedure your employer has to follow.

The first seventy-two hours

Runway is the number that actually governs the outcome

The settlement is the figure people fixate on, and it is the less important of the two. What determines how a layoff plays out is the ratio between that money and your monthly burn, because that ratio decides whether you run a real search or a rushed one.

Under roughly three months, the deadline starts making your decisions for you. You stop negotiating, you widen your criteria past the point of sense, and you accept something you would have declined in week two. That is the actual mechanism by which a layoff becomes a multi-year setback — not the job loss, but the clock attached to it. At six months or more, you are negotiating from something close to the position you held while employed.

Which is the argument for doing this arithmetic before you need it. A settlement you cannot change is a fact. A burn rate you can cut, and a search you start with five months of room rather than two, are decisions — and they are worth more than anything you will win by arguing over the severance line.

If this hasn't happened to you

Two things are worth doing while nothing is wrong, because neither is available once the meeting has happened.

Read your own employment contract for the notice period and the termination clause, and check your payslip for what your basic actually is as a share of your gross — that number is the base every statutory figure is calculated on, and the codes now require it to be at least half of total pay. Then work out your runway at today's expenses. Most people discover it is shorter than they assumed, and the fix for that takes months to apply, which is precisely why it has to be done in advance.

The broader question — how exposed your role actually is, and how quickly the market would take you — is a different one, and it is the one worth answering while you still have the option of acting on the answer. Our replaceability calculator scores the first on your own skills rather than an average for your title.