The rise of artificial intelligence (AI) is causing huge changes in India’s once-thriving IT sector. Major corporations like Tata Consultancy Services (TCS) are laying off a lot of workers. TCS, India’s biggest private employer and a leader in the IT services business, has said it will cut more than 12,000 jobs at the middle and senior management levels. This decision is part of a bigger trend of AI-driven job cuts in India’s software industry.
As AI technologies change the sector, businesses are rethinking how they do business, which is causing job layoffs and making people worry about the future of India’s growing middle class. The IT sector has been the main source of formal jobs in the country for a long time, but AI breakthroughs are making businesses rethink how they hire people.
Why Are Businesses Like TCS Letting People Go?
TCS said that its move to cut jobs was part of a larger plan to make the company “future-ready” by using AI in all of its activities. For years, TCS and other big Indian software companies have used a labor-intensive model to provide cheap software solutions to clients around the world. But now that AI is taking over a lot of mundane chores, corporations are focused on coming up with new ideas instead of just hiring inexpensive workers.
Neeti Sharma, CEO of employment company TeamLease Digital, said, “People managers are being let go while the doers are being kept to rationalize the workforce and bring in Efficiencies have led to a lot of employment in new technologies like AI, cloud computing, and data security; however, the number of jobs lost has been much higher than the number of new jobs created. Here is the link to our article on DeepSeek ByteDance Accusation
What effect is AI having on jobs in India’s tech industry?
The quick use of AI to fire people has shown that there is a rising “skills mismatch” in India’s IT business. Companies are spending a lot of money on programs to train people in AI skills so they can hire new AI experts. At the same time, they are firing people who don’t have the right skills. Rishi Shah, an economist at Grant Thornton Bharat, says that companies are looking at how they organize their workers again to make sure that their talents match the skills needed to work with AI technologies.
Nasscom, the industry authority for India’s software sector, says that the country would need one million AI specialists by 2026. This means that there is a big vacuum in talent in the business. But for now, less than 20% of India’s IT workers know how to use AI. This mismatch is putting more stress on the workers and making the layoffs happen more quickly.
What do AI layoffs mean for the economy as a whole?
The layoffs in India’s software industry are bad for more than just the workers who lose their jobs. They are bad for the whole economy. For a long time, the IT industry has been the main provider of formal, white-collar jobs in India. It has been a major factor in the growth of the middle class in the country, which has led to more demand for goods and services in cities like Bengaluru, Hyderabad, and Pune. But the future of India’s services-driven economic expansion is questionable because secure, well-paying jobs are becoming less common.
India’s IT industries have hired about 600,000 new graduates per year in the last several years. This number has, however, plummeted dramatically to only 150,000, which has led to worries that many new graduates may have trouble finding work. Additionally, although new fields such as financial technology and global capability centers (GCCs) are emerging, they cannot accommodate as many talented individuals as the IT sector once could. Here is the link to our article on DeepSeek AI Revolution
What will AI mean for India’s middle class?
India’s middle class grew along with the country’s IT boom, but now they are in trouble because of layoffs caused by AI. Arindam Paul, the founder of Atomberg and an entrepreneur, said that AI automation might take away 40–50% of present white-collar jobs. This could spell the end of the middle class and slow India’s consumption-driven economic growth.
Many areas are feeling the effects of this upheaval. D. Muthukrishnan, a mutual fund distributor in southern India, said that the drop in IT jobs could harm related fields, real estate, and high-end goods. The decline in employment is a big problem for India, which has relied on its booming IT sector to produce millions of jobs and help the economy thrive.
Final thoughts on AI’s future in India’s workforce
Both problems and chances come with the rise of AI-driven layoffs in India’s tech sector. As enterprises like TCS adjust to changes caused by AI, the country’s economy as a whole has to deal with a job market that is getting smaller for fresh graduates and people who work in traditional IT jobs. There may be new chances in emerging technologies because of the push for upskilling and innovation. However, the future of India’s middle class and its economic prospects are still unclear. India’s ability to stay a global tech leader and support long-term economic growth will depend on how it handles this AI revolution.
