India's information technology workforce—long a pathway to middle-class stability—faces a structural upheaval as artificial intelligence adoption and corporate cost-cutting eliminate tens of thousands of jobs, leaving workers to navigate an uncertain landscape of retraining demands and shrinking entry-level opportunities.
AI adoption and cost-cutting measures are leading to significant job losses for Indian IT workers, with major companies such as Oracle and Tata Consultancy Services reducing their workforces as the sector undergoes a fundamental shift toward artificial intelligence, data science, and cybersecurity skills. Earlier in April 2026, Oracle began laying off an estimated 10,000 employees in India, part of a wider international workforce reduction attributed to the firm's desire to cut costs and increase spending on data centre infrastructure to handle AI workloads. TCS shed more than 23,400 jobs, with its employee headcount falling to 584,519 in the financial year ending in March 2026 from 607,979 in the financial year 2025.
The Indian IT sector accounted for around 7.2 million jobs in 2024, but AI has led to tens of thousands of job losses and raised critical questions about how India prepares its workforce for emerging tech opportunities. According to data from TeamLease Digital, India's tech ecosystem has seen close to 40,000 layoffs in the past year or so, including many mid-level managerial roles.
The Human Cost of Automation
Ms Tanya Gupta, who declined to use her real name because she does not want her being laid off to affect future employment prospects, said her annual contract with an American financial software firm in Dublin, Ireland, was not renewed in 2026 as the company invested more in artificial intelligence. She had worked handholding new customers for nearly five years. She said: "A lot of the repetitive work is being automated, allowing employees to focus more on higher-value, strategic and creative work." She also said: "If an engineer took two days to finish a task, the same thing can now be achieved by AI in less than 30 minutes. So, logically, the company felt it does not need the same workforce size as before."
Ms Neeti Sharma, chief executive of TeamLease Digital, characterized the current crisis as fundamentally different from previous downturns. She said: "Unlike previous cycles, this is a structural – not cyclical – correction driven by AI-led productivity compression, slower global discretionary tech spending, and a pivot away from legacy services."
Mr Ashish Singh, founder of HireMaven, explained that Indian IT services firms had gone on a hiring spree after the pandemic ebbed, with salaries doubled or tripled as firms retained talent and hired new workers. Projects did not materialise in the anticipated large numbers amid global economic uncertainty, making large staff "bench strengths" a liability. He said: "If a firm had 10 employees engaged in coding and development, they today need just one person with the knowledge of AI to handle all that work." He said this made many junior employees and mid-level team managers redundant and prompted employers to reduce headcounts while investing in AI tools.
The Skills Gap and Government Response
Ms Sharma said employees unable to upskill and align themselves to future needs would be affected in the next 12 to 18 months. An October 2025 report from NITI Aayog, an Indian government think-tank, warned that AI-driven automation could displace up to two million jobs in India's tech services sector by 2031, but said that if the country skill people strategically, the number of jobs in the sector could swell by around four million in the next five years.
The Ministry of Electronics and Information Technology has undertaken several measures to skill the country's workforce in new and emerging sectors. An estimated 168,000 individuals have been trained in various AI-related courses and the ministry is setting up labs in Tier 2 and 3 cities across the country to offer foundational-level courses in AI and data-related fields.
However, a significant talent gap persists. India already accounts for around 16 per cent of the global AI talent pool, but lack of adequate talent remains a concern. According to a report from Deloitte, Indian AI talent demand is projected to grow from around 600,000 to more than 1.25 million by 2027. The AI market is expected to grow at 25 per cent to 35 per cent, potentially signalling a demand-supply gap in the talent pool and a need for upskilling existing talent.
Shifting Opportunities and Barriers
Mr Kashyap Kompella, founder of RPA2AI Research, said AI would not eliminate the need for developers. "Their value will shift from code creation to validation, testing, integration, security and production reliability. These are areas where human judgment, context and accountability remain critical," he said. "So the technology sector is not eliminating human roles, but we will see a different mix of roles and skills."
He said new technologies were creating roles for professionals in AI, data, cybersecurity and cloud computing, and that skilled engineers who understand industries such as finance, healthcare, manufacturing or telecommunications and can apply AI within those contexts will be in higher demand. He also said employment opportunities were expanding beyond traditional IT services into the booming data centre ecosystem, which requires technicians, cybersecurity professionals, civil engineers and energy experts.
Yet access to retraining presents its own barriers. Ms Gupta said her job contract ends in April 2026 and that she invested in a 12-week online AI-skilling course from MIT Professional Education that cost her around 200,000 rupees, or S$2,700—a significant personal expense for workers already facing job loss. She said: "You have to keep yourself upskilled to be relevant in the employment market."
Ms Gupta also highlighted the collapse of a pathway that had anchored middle-class aspirations for decades. She said the conventional strategy of studying computer science in college to become a software developer is no longer sustainable as entry-level coding jobs shrink. She said many people became software programmers with the hope of being deployed overseas to work for their employer's clients, particularly in the US, and earning much higher salaries in US dollars, but that dream has petered out with increased restriction on the employment of overseas workers in America.
Ms Sharma said: "All this is a reality check for Indian families." She also said: "We need parents and their children to understand the shift in skills and domains that is happening right now in India and pivot into streams other than computer science so that each one stands a better chance at securing employment."
Why This Matters:
The transformation of India's IT sector reveals how technological disruption, absent coordinated public intervention, can rapidly hollow out employment pathways that have supported millions of workers and their families. While new opportunities in AI, data science, and cybersecurity may eventually emerge, the immediate human cost—tens of thousands of job losses, the collapse of entry-level career pipelines, and the burden of individual retraining costs—falls disproportionately on workers with the fewest resources. Government skilling initiatives reach only a fraction of those affected, and a projected demand-supply gap in AI talent through 2027 suggests that upskilling alone cannot bridge the structural mismatch. The closure of overseas work pathways further constrains options for workers seeking higher wages and career advancement. These shifts underscore the need for stronger public investment in workforce transition support, equitable access to retraining, and deliberate industrial policy to ensure that technological gains benefit workers and communities, not only corporate balance sheets.