The Indian information technology industry, once hailed as the most dependable job generator for the nation, finds itself at one of the most uncertain moments in its recent past. According to current industry estimates, an estimated 25,000 to 35,000 technology jobs could potentially lose their jobs over 2026 due to automation and artificial intelligence, which have forced the tech industry to rethink how it conducts business.
This shift from previous waves of layoffs driven primarily by poor demand has been triggered this time around by something else—machines taking the place of human engineers.
As per staffing agencies, thousands of tech workers have already been laid off in 2026, and this figure could easily increase significantly by the end of the year. The unique thing about this lay-off cycle is its silence. Workers are being laid off in such a way that no official layoff announcement is being made—something which is now termed as “silent layoffs.” In lieu of large retrenchment campaigns, businesses are now using performance-driven evaluations and job eliminations for reducing headcount.
When we look into the figures per company, then the scenario becomes clearer. Tata Consultancy Services (TCS), the largest Indian IT services firm, has cut down its employees by over 23,400, having the total strength of its employees at 584,519 as of March 2026, as opposed to 607,979 in the previous year.
TCS also revealed that it plans to shed its further 12,000 employees. This reduction in workforce is one of the biggest layoffs in the recent history of a major Indian company.
Oracle laid off an estimated 10,000-12,000 of its Indian workers, as a part of its global layoffs linked with investment of $20Bn in building data centers that are AI ready.
For the top five Indian IT services firms, the net additions were reduced by 7,389 during FY2026 in comparison with the slight growth of 12,718 in the previous year.
As per TeamLease Digital, India's technology sector has seen close to 40,000 job losses in just one year period.
Layoffs caused by IT in India were associated with recessions in the economy before, i.e., when budgets became tight, fewer hires were made. However, things are changing now: Generative AI is replacing coding, testing, and maintenance activities that Indian IT firms specialized in. As AI systems improve at writing and validating code, the need for big engineering squads to do routine work is fading away quickly.
The consequences are apparent both for entry-level and more experienced professionals. According to Xpheno's June 2026 Tech Jobs Outlook report, active technology hiring demand reached only 96,000 positions—the lowest level in 28 months and 14% less than last month. The number of full-time technology jobs decreased by 24% over the year, and there is a 44% decrease in demand for entry-level employees and 67% for the senior-level ones.
The biggest drop in hiring entry-level workers is especially dangerous because, for a long time, graduates of engineering schools relied on IT companies as employers.
Indeed, while IT staffing levels as a whole have decreased by about 3%, hiring levels for AI positions jumped 16% in June 2026 as large corporations adjust their focus on recruiting AI staff members. While companies are actively recruiting engineers working in the fields of AI, cloud computing, and cybersecurity, they do so in smaller numbers and not necessarily for the same pool of staff.
According to the Deloitte report, India's requirement for AI experts is projected to increase from roughly 600,000 people to over 1.25 million in 2027. Nevertheless, the overall AI industry is likely to see its growth rates hit 25-35%, leading to an imbalance between supply and demand—thus resulting in too few AI professionals and a lack of coding jobs in traditional programming.
Neelkanth Mishra, a member of the Economic Advisory Council to the Prime Minister, has noted that the concerns regarding loss of jobs are premature and that it would be prudent to view the industry holistically—that is, including not only traditional IT services companies but also the global capability centers operated by multinational companies in India.
However, behind those figures are individuals who have to restart their lives. Workers fired from a job they had been working on for over ten years say how unsettling it was to lose not only a source of income but also years of routine and identity.
Rajani Sinha, Chief Economist at CareEdge Ratings, has remarked that one of the most pressing effects of such layoffs is the pressure on income stability, predicting that decreased disposable income could negatively impact consumption in areas highly dependent on IT professionals such as real estate, retail and hospitality industry. The latter is quite visible now: house sales in Indian largest cities have gone down by 13% in the first quarter of 2026, with IT layoffs among other factors listed by experts.
The situation is exacerbated by unfavorable background for youth who are looking for jobs. The report State of Working India 2026 from Azim Premji University shows that almost 40% of young graduates in India are without jobs – a statistic which remained steady throughout several decades. To be more specific, unemployment rate is about 40% among 15-25 year-olds and about 20% among 25-29 year-olds.
Effects have started spreading to university levels as well. Some top-notch engineering institutes are witnessing lower placement ratios despite no change in salaries of those that have been recruited. Analysts view this trend as changing the meaning behind a recruitment offer from an IT giant. According to the founder and CEO of TeamLease EdTech, Shantanu Rooj, while before large IT corporations used to be seen as the most secure recruiters of engineering graduates in bulk, now the signal has shifted towards selective recruitment, artificial intelligence, productivity, and specialization.
This has far-reaching implications for the generation of students who considered a computer science degree a safe path to a lucrative career.
This path seems questionable now amid decreasing entry-level coding jobs and the preference of companies for applicants who understand AI software.
In response to this development, many individuals have decided to make an investment in themselves.
There are several individuals who have been laid off, but they are taking courses in areas such as artificial intelligence that can help them to remain relevant in the market.
In addition, individuals have spent considerable amounts of money; in some cases, up to ₹2 lakh on specialized online certifications in AI skills.
The advice from the Human Resource Management experts remains constant; upskilling in areas of AI, cloud computing, and cybersecurity has become necessary to remain safe in jobs in the technology industry, rather than optional. Firms, on the other hand, have decided to change their approach by automating themselves in AI and focusing only on high value-added jobs.
The experts expect that this trend will be witnessed throughout the period of 2026 and 2027.
