NEW DELHI – The displacement of native Indian IT workers is accelerating as AI adoption and corporate cost-cutting measures lead to significant job losses, fundamentally reshaping the sector and challenging the middle-class aspirations it once sustained. Major corporations, including Oracle and Tata Consultancy Services (TCS), are reducing their workforces as the industry undergoes a structural shift towards artificial intelligence, data science, and cybersecurity skills.
Ms. Tanya Gupta, whose real name was withheld, reported that her annual contract with an American financial software firm based in Dublin, Ireland, was not renewed in April 2026. This decision was attributed to the company’s increased investment in artificial intelligence, with Ms. Gupta noting that “a lot of the repetitive work is being automated, allowing employees to focus more on higher-value, strategic and creative work.” She further explained that a task previously requiring two days for an engineer can now be completed by AI in under 30 minutes, leading the company to conclude it no longer required the same workforce size.
The Cost to the People
The Indian IT sector, which supported approximately 7.2 million jobs in 2024, has seen tens of thousands of positions eliminated due to AI integration. Earlier in April 2026, Oracle initiated layoffs affecting an estimated 10,000 employees in India, as part of a broader international workforce reduction. This move was explicitly linked to the firm’s strategy to cut costs and increase spending on data center infrastructure to manage AI workloads. Similarly, TCS shed more than 23,400 jobs, with its employee headcount decreasing to 584,519 in the financial year ending in March 2026, down from 607,979 in financial year 2025.
Firms like TCS and Infosys historically served as pillars for middle-class aspirations in India, providing stable and well-paying employment. However, hiring has now decelerated, and the required skill sets have drastically shifted in the era of AI. Data from TeamLease Digital indicates that India’s tech ecosystem has experienced close to 40,000 layoffs in the past year or so, impacting many mid-level managerial roles.
Ms. Neeti Sharma, chief executive of TeamLease Digital, characterized this as a structural correction, rather than a cyclical one. She attributed it to AI-led productivity compression, a slowdown in global discretionary tech spending, and a strategic pivot away from legacy services. Mr. Ashish Singh, founder of HireMaven, noted that Indian IT services firms had engaged in extensive hiring post-pandemic, with salaries often doubled or tripled to retain talent. However, anticipated large-scale projects failed to materialize amidst global economic uncertainty, transforming large staff “bench strengths” into liabilities.
Mr. Singh further explained that AI began to exert its impact concurrently, with basic coding work now outsourced to AI repositories and autonomous or semi-autonomous tools. He stated that a firm previously employing 10 individuals for coding and development now requires only one person with AI knowledge to manage the same workload. This shift has rendered many junior employees and mid-level team managers redundant, prompting employers to reduce headcounts while simultaneously investing in AI tools.
Elite-Driven Transformation
Ms. Sharma warned that employees unable to upskill and adapt to future demands would face adverse consequences within the next 12 to 18 months. Mr. Kashyap Kompella, founder of RPA2AI Research, maintained that AI would not eliminate the need for developers entirely, but their value would shift from code creation to validation, testing, integration, security, and production reliability, areas where human judgment and accountability remain critical. He concluded that the technology sector is not eliminating human roles, but rather creating a different mix of roles and skills.
New technologies are generating demand for professionals in AI, data, cybersecurity, and cloud computing. Skilled engineers capable of applying AI within specific industries such as finance, healthcare, manufacturing, or telecommunications are now in higher demand. Employment opportunities are also expanding beyond traditional IT services into the burgeoning data center ecosystem, requiring technicians, cybersecurity professionals, civil engineers, and energy experts.
National Response to Global Forces
A report from NITI Aayog, an Indian government think-tank, issued about six months ago, cautioned that AI-driven automation could displace up to two million jobs in India’s tech services sector by 2031. However, the report also suggested that strategic national skilling initiatives could lead to an increase of approximately four million jobs in the sector within the next five years. In response, the Ministry of Electronics and Information Technology has implemented 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 establishing labs in Tier 2 and 3 cities across the country to provide foundational-level courses in AI and data-related fields. Despite India accounting for approximately 16 percent of the global AI talent pool, a lack of adequate talent remains a significant concern. A report from Deloitte projects Indian AI talent demand to grow from around 600,000 to more than 1.25 million by one year away, while the AI market is expected to grow at 25 percent to 35 percent, signaling a potential demand-supply gap in the talent pool and an urgent need for upskilling existing talent.
Ms. Gupta, whose job contract concludes in April 2026, invested approximately 200,000 rupees, or S$2,700, in a 12-week online AI-skilling course from MIT Professional Education. She emphasized the necessity of continuous upskilling to remain relevant in the employment market. The conventional strategy of pursuing computer science in college to become a software developer is no longer sustainable as entry-level coding jobs diminish. Many individuals pursued software programming with the aspiration of overseas deployment to work for employers’ clients, particularly in the US, to earn significantly higher salaries in US dollars. However, that dream has now “petered out” due to increased restriction on the employment of overseas workers in America. Ms. Sharma described this as a “reality check for Indian families,” urging parents and children to comprehend the ongoing shift in skills and domains within India and to pivot into streams other than computer science to enhance their employment prospects. This globalist transformation forces native populations to adapt or face economic marginalization.