April 17, 2026
new delhi – Many Indian workers form the backbone of information technology companies around the world. One such person is Tanya Gupta (not her real name), who has been taking on new clients at an American financial software company in Dublin, Ireland, for nearly five years.
Things went well, but her annual contract was not renewed in 2026. This is part of the company’s broader move to increase investment in artificial intelligence, which promises to be not only more efficient to produce but also cheaper in the long run.
“Many repetitive tasks have been automated, freeing up employees to focus on higher-value, strategic and creative work,” she said.
“Where it took an engineer two days to complete a task, AI can now accomplish the same in less than 30 minutes. So logically, the company thought it didn’t need the same amount of people as before.”
The 39-year-old declined to give her real name because she did not want her future employment prospects to be affected if she was made redundant.
She is one of the many Indian IT workers who have lost their jobs over the past year amid the industry’s increased reliance on AI and moves to reduce workforces and make operations more cost-effective.
India is no exception to this trend, with the country’s iconic computer and information services sector being a major employer.
The sector accounted for approximately 7.2 million jobs in 2024, but as AI continues to make inroads into the country’s economy, it will lead to tens of thousands of job losses and raise serious questions about how India can properly develop its workforce for emerging technology opportunities and prepare for the transition.
In early April, news broke that Oracle would lay off an estimated 10,000 employees across the country. This is believed to be part of broader international job cuts as the company looks to cut costs and increase spending on data center infrastructure to handle AI workloads.
This is not the only such notable downsizing in India. Tata Consultancy Services (TCS), the country’s largest IT services exporter, also cut more than 23,400 jobs, reducing its workforce from 607,979 in fiscal 2025 to 584,519 in the fiscal year ending March 2026.
Companies like TCS and Infosys have long supported the aspirations of India’s middle class through stable, well-paying jobs, but that path is becoming increasingly uncertain as employment slows and skill requirements change in the age of AI.
India’s technology ecosystem has seen nearly 40,000 layoffs in the past year or so, including many in middle management positions, according to data from TeamLease Digital, a talent solutions company for the IT industry.
“Unlike previous cycles, this is a structural rather than cyclical adjustment driven by AI-driven productivity compression, a slowdown in global discretionary technology spending, and a shift away from legacy services,” said Neeti Sharma, CEO of TeamLease Digital.
The post-COVID-19 boom has collapsed
As the pandemic subsides, many Indian IT services companies are looking to return to traditional work models that rely on large workforces, allowing them to bid on and take on large volumes of contracts from clients.
“They were hiring because they wanted to get back on track, both in terms of revenue and staff,” said Ashish Singh, founder of HireMaven, a company that specializes in recruiting for the IT sector.
Salaries doubled and tripled as companies retained talent and hired new talent. However, reality soon hit hard as projects did not materialize as often as expected amid global economic uncertainty and many staff ‘bench forces’ became a liability to their employers.
Around the same time, AI began to increasingly feel its impact. Much of the basic coding work has been outsourced to AI repositories with autonomous or semi-autonomous tools that can directly assist with software engineering tasks based on simple prompts.
“If a company has 10 employees working on coding and development, now it only takes one person with AI knowledge to handle all that work,” said Singh.
This eliminated the need for many junior employees and mid-level team managers to perform basic coding tasks, forcing employers to reduce headcount while investing in AI tools.
Experts fear that India’s IT sector will be reeling from further “workforce rationalization” in the coming months, as investments in AI begin to bear further fruit and companies pump more funds towards expanding profitable AI-driven businesses.
“Many employees who are unable to upskill and align with the future needs of their organizations will be impacted over the next 12 to 18 months,” Sharma said.
Both a threat and an opportunity
Kashyap Kompela, founder of RPA2AI Research, an analysis and advisory firm focused on AI governance and policy, said AI will not eliminate the need for developers.
“That value will shift from code creation to validation, testing, integration, security, and production reliability. These are areas where human judgment, context, and accountability continue to be important,” he said. “The technology sector will not eliminate human roles, but we will see a different mix of roles and skills.”
Beyond the short-term attrition phase, new jobs are expected as employment patterns in the technology sector continue to evolve. The emergence of new technologies is creating roles for professionals in AI, data, cybersecurity, and cloud computing, with demand outstripping supply.
In addition, skilled engineers who understand specific industries such as finance, healthcare, manufacturing, and telecommunications and can apply AI within those contexts will be in even greater demand, Kompella added.
Employment opportunities are expanding beyond traditional IT services. This includes a role in the rapidly growing data center ecosystem, which requires not only engineers and cybersecurity experts, but also civil engineers to help set up the centers and energy experts to keep them running efficiently.
An October 2025 report by Indian government think tank NITI Aayog warned that AI-driven automation could eliminate up to 2 million jobs in India’s technology services sector by 2031, but added that if the country strategically develops its talent pool, the number of jobs in the sector could increase by about 4 million over the next five years.
The Ministry of Electronics and Information Technology has taken several steps to train the country’s workforce in new and emerging fields. An estimated 168,000 people have been trained in various AI-related courses, and the ministry has set up laboratories in tier-2 and tier-3 cities across the country to offer foundation-level courses in AI and data-related fields.
India already accounts for around 16% of the global AI talent pool, but the lack of suitable talent remains a concern.
According to a report by Deloitte, the demand for AI talent in India is expected to grow from around 600,000 to more than 1.25 million by 2027. However, the AI market is expected to grow between 25% and 35%, which may indicate a demand-supply gap in the talent pool and the need to upskill existing talent.
Mr. Gupta, whose employment contract ends in April 2026, invested in a 12-week online AI skills course from MIT Professional Education, which cost him about 200,000 rupees (S$2,700). “You have to keep improving your skills to be relevant in the job market,” she said.
But this AI-driven job search has a broader message for India’s youth and their parents as they look for jobs. The traditional strategy of studying computer science in college and becoming a software developer is no longer sustainable as entry-level coding jobs decline.
Many became software programmers with the hope of working for clients of employers abroad, especially in the United States, and earning much higher salaries in US dollars. That dream disappeared as restrictions on the employment of overseas workers in the United States were tightened.
“This is all a reality check for Indian families,” said Ms. Sharma of TeamLease Digital.
“We need parents and their children to understand the skills and field changes currently happening in India and pivot to fields other than computer science to increase their chances of securing employment.”
