Mass layoffs have been announced by several mega companies, especially tech giants, in the US, largely due to AI and automation. In India too, some companies have announced layoffs. But more concerning in India currently is the trend of so-called silent layoffs which are putting the squeeze on India’s tech industry workforce. A recent ET report says the numbers could be 50,000 people or more by the end of this year, according to experts.
While Tata Consultancy Services ( TCS) drew much attention when it announced in July that it was sacking 2% of its workforce (about 12,000 out of 600,000) by March 2026, scores of large and medium-sized technology services companies have been asking people to resign or find other jobs quietly, as per the ET report. While the total number of dismissals is difficult to measure, estimates peg this at 25,000 between 2023 and 2024, suggesting that the number is set to double this year.
Layoffs are bad for everyone
While mass layoffs are obviously bad for the laid off employee, they are also bad for the larger economy in India because India's economy is driven by consumption. Tech sector employees constitute a significant number of consumers in top urban centres. It is the backbone of urban economy in many big cities.
According to Rajani Sinha, Chief Economist at CareEdge Group, the slowdown in IT hiring and wages poses a growing risk to India’s consumption-driven growth model. Sinha told ET Now that India’s IT industry, once a major job creator, is now witnessing flat headcount growth and slower wage increases. “Employee costs for IT companies grew only 5% in FY25 compared to an average of 15% during FY19–FY23,” she noted, adding that both lower hiring and subdued salary growth are contributing factors.
The Indian IT sector employs millions in urban centers like Bengaluru, Hyderabad, and Pune — making it central to household income and consumption patterns. “The IT sector’s stagnation has a domino effect,” Sinha said. “When wage growth falters, it impacts consumer spending, sentiment, and overall economic momentum.” Globally, too, job losses in tech and the rise of AI-led automation have sparked fears of an employment squeeze that could extend to emerging economies such as India.
While Sinha acknowledged that AI can enhance productivity, she warned that it may also displace labour-intensive roles — particularly in countries like India where large segments of the workforce remain dependent on service exports. “AI transformation is happening rapidly. India must prepare for it through reskilling and R&D investments,” she said.
Stress in tech sector jobs has appeared when India's overall service sector jobs are undergoing a slow transitioning. For long, India’s services sector has been seen as the engine of economic growth. Now, it is facing a reality check. While it contributes over half of the national output, it employs less than a third of the workforce, exposing a structural imbalance in India’s development story. According to a new report by NITI Aayog, titled ‘India’s Services Sector: Insights from Employment Trends and State-Level Dynamics’, services employment rose to 29.7% in 2023-24 from 26.9% in 2011-12, adding about 40 million jobs in six years. Yet, this share remains well below the global average of 50%, pointing to what the Aayog calls a “slower structural transition".
AI can also boost job growth
If AI can lead to mass layoffs in India in the short term, with right policies it can also help generate millions of new jobs in future.
NITI Aayog has recently released a report titled 'Roadmap for Job Creation in the AI Economy', outlining how AI can significantly impact India’s employment landscape. According to the report, AI has the potential to create up to 4 million new jobs in the country by 2030, particularly within the technology and customer experience sectors. Developed in collaboration with NASSCOM and BCG, the report highlights a mission-mode approach to position India as the global hub for AI talent by 2035.
The roadmap points out that India’s $245 billion technology and customer experience (CX) sectors are already undergoing disruption due to AI adoption. It warns that routine roles—such as quality assurance engineers and Level 1 support agents—face a high risk of redundancy by 2031 if urgent action is not taken. However, it also states that strategic skilling and innovation can turn this disruption into a national opportunity.
The report lists a range of emerging roles within technical and engineering fields. These include AI Engineer, who develops tools and processes for AI applications, and Machine Learning Engineer, responsible for building and refining models that allow AI to function in human-like ways. Other roles mentioned are Data Scientist, who analyses and interprets data to support decisions, and Data Engineer, who manages the infrastructure that enables large-scale data processing. Robotics Engineers and Computer Vision Engineers are also in demand, especially for roles involving automation and visual data interpretation. Natural Language Processing (NLP) Engineers are increasingly needed to improve AI’s understanding of human language.
NITI Aayog's roadmap highlights several newer job categories emerging in the AI economy. Prompt Engineers are responsible for designing and optimising inputs that guide AI models. AI Ethics Specialists ensure the responsible use of AI systems, while AI Trainers build and refine datasets to improve machine performance. The report also identifies the need for AI Product Managers, AI Customer Experience Specialists, and AI Literacy Trainers. Specialists in applying AI within healthcare and cybersecurity domains are gaining importance, including roles such as AI for Healthcare Specialist and Cybersecurity Analyst with AI expertise.
A key pillar of the roadmap is the rise of hybrid and leadership roles in AI implementation. Positions like AI Implementation Manager and Human-AI Interaction Designer focus on integrating AI into existing workflows. Business Intelligence Developers and AI Transformation Leads are also essential for managing strategic direction and aligning AI capabilities with business goals.
While Tata Consultancy Services ( TCS) drew much attention when it announced in July that it was sacking 2% of its workforce (about 12,000 out of 600,000) by March 2026, scores of large and medium-sized technology services companies have been asking people to resign or find other jobs quietly, as per the ET report. While the total number of dismissals is difficult to measure, estimates peg this at 25,000 between 2023 and 2024, suggesting that the number is set to double this year.
Layoffs are bad for everyone
While mass layoffs are obviously bad for the laid off employee, they are also bad for the larger economy in India because India's economy is driven by consumption. Tech sector employees constitute a significant number of consumers in top urban centres. It is the backbone of urban economy in many big cities.
According to Rajani Sinha, Chief Economist at CareEdge Group, the slowdown in IT hiring and wages poses a growing risk to India’s consumption-driven growth model. Sinha told ET Now that India’s IT industry, once a major job creator, is now witnessing flat headcount growth and slower wage increases. “Employee costs for IT companies grew only 5% in FY25 compared to an average of 15% during FY19–FY23,” she noted, adding that both lower hiring and subdued salary growth are contributing factors.
The Indian IT sector employs millions in urban centers like Bengaluru, Hyderabad, and Pune — making it central to household income and consumption patterns. “The IT sector’s stagnation has a domino effect,” Sinha said. “When wage growth falters, it impacts consumer spending, sentiment, and overall economic momentum.” Globally, too, job losses in tech and the rise of AI-led automation have sparked fears of an employment squeeze that could extend to emerging economies such as India.
While Sinha acknowledged that AI can enhance productivity, she warned that it may also displace labour-intensive roles — particularly in countries like India where large segments of the workforce remain dependent on service exports. “AI transformation is happening rapidly. India must prepare for it through reskilling and R&D investments,” she said.
Stress in tech sector jobs has appeared when India's overall service sector jobs are undergoing a slow transitioning. For long, India’s services sector has been seen as the engine of economic growth. Now, it is facing a reality check. While it contributes over half of the national output, it employs less than a third of the workforce, exposing a structural imbalance in India’s development story. According to a new report by NITI Aayog, titled ‘India’s Services Sector: Insights from Employment Trends and State-Level Dynamics’, services employment rose to 29.7% in 2023-24 from 26.9% in 2011-12, adding about 40 million jobs in six years. Yet, this share remains well below the global average of 50%, pointing to what the Aayog calls a “slower structural transition".
AI can also boost job growth
If AI can lead to mass layoffs in India in the short term, with right policies it can also help generate millions of new jobs in future.
NITI Aayog has recently released a report titled 'Roadmap for Job Creation in the AI Economy', outlining how AI can significantly impact India’s employment landscape. According to the report, AI has the potential to create up to 4 million new jobs in the country by 2030, particularly within the technology and customer experience sectors. Developed in collaboration with NASSCOM and BCG, the report highlights a mission-mode approach to position India as the global hub for AI talent by 2035.
The roadmap points out that India’s $245 billion technology and customer experience (CX) sectors are already undergoing disruption due to AI adoption. It warns that routine roles—such as quality assurance engineers and Level 1 support agents—face a high risk of redundancy by 2031 if urgent action is not taken. However, it also states that strategic skilling and innovation can turn this disruption into a national opportunity.
The report lists a range of emerging roles within technical and engineering fields. These include AI Engineer, who develops tools and processes for AI applications, and Machine Learning Engineer, responsible for building and refining models that allow AI to function in human-like ways. Other roles mentioned are Data Scientist, who analyses and interprets data to support decisions, and Data Engineer, who manages the infrastructure that enables large-scale data processing. Robotics Engineers and Computer Vision Engineers are also in demand, especially for roles involving automation and visual data interpretation. Natural Language Processing (NLP) Engineers are increasingly needed to improve AI’s understanding of human language.
NITI Aayog's roadmap highlights several newer job categories emerging in the AI economy. Prompt Engineers are responsible for designing and optimising inputs that guide AI models. AI Ethics Specialists ensure the responsible use of AI systems, while AI Trainers build and refine datasets to improve machine performance. The report also identifies the need for AI Product Managers, AI Customer Experience Specialists, and AI Literacy Trainers. Specialists in applying AI within healthcare and cybersecurity domains are gaining importance, including roles such as AI for Healthcare Specialist and Cybersecurity Analyst with AI expertise.
A key pillar of the roadmap is the rise of hybrid and leadership roles in AI implementation. Positions like AI Implementation Manager and Human-AI Interaction Designer focus on integrating AI into existing workflows. Business Intelligence Developers and AI Transformation Leads are also essential for managing strategic direction and aligning AI capabilities with business goals.
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