Thousands have been laid off since the beginning of the year globally as companies look to realign workforces in the age of AI. India is no exception and the trend is likely to continue, experts said.
According to Layoffs. fyi, which tracks employee retrenchments globally, jobs have been lost since the beginning of the year at companies such as Microsoft, Intel, HP and Meta.
In India, TCS said last month that 2% of its workforce, about 12,000 people, will be asked to go. Oracle is retrenching employees in phases, said people aware of the matter.
Layoffs began last month starting with programme managers and have been happening in phases, they said. Oracle did not respond to queries.
Layoffs are more pronounced in part due to the rising adoption of AI, which can perform routine tasks efficiently.
Middle managers, freshers at risk
Teamlease Digital CEO Neeti Sharma told ET that, by 2026, about one in five companies in India could see the exit of half their middle managers as AI begins taking over routine tasks such as reporting, scheduling and performance monitoring.
While IT services and outsourcing will see the largest impact, with 30-40% of the middle management roles going as AI automates project management and client communication, this will also impact banking and finance as well as manufacturing and retail.
“Healthcare managers are least at risk (10–15%), since much of their work involves direct coordination with people, which AI is less able to replace,” Sharma said.
While not every company will see these changes, many process-heavy industries in India are likely to restructure their workforce and reduce middle management due to AI during this period, Sharma said.
Apart from middle management, any roles that are repetitive and rule-based will be impacted. “The heaviest impact will fall on the lower rungs of the labour pyramid, namely the traditional entry-level coding and back-office roles that Indian IT has relied on for scale,” said HFS Research founder Phil Ferst.
This has already come down in the last few years. While things are improving, instead of hiring in bulk from campuses, Sharma said companies are looking for candidates with specific, in-demand tech skills.
Futureproofing
While AI is playing a role, as companies adapt to the shift, these changes are more nuanced, experts said.
Vianai Systems founder and former Infosys CEO Vishal Sikka said technology is creating a sea change in the software and services industry that employs a huge workforce.
“If we don’t act on the opportunity, perhaps we will get disrupted. But the way I see it is that there is a tremendous opportunity,” said the former SAP executive.
Ferst said layoffs are less about short-term cost-cutting and more about realigning talent toward the next wave of growth areas.
“For India, this means the pyramid delivery model of low-cost coding and maintenance is eroding faster than anticipated. The demand is shifting from bulk engineering and support roles to higher-end skills in AI engineering, data science, platform integration, and business transformation,” he said.
Also Read: AI at work: Job cuts and tech leader opinions
According to Layoffs. fyi, which tracks employee retrenchments globally, jobs have been lost since the beginning of the year at companies such as Microsoft, Intel, HP and Meta.
In India, TCS said last month that 2% of its workforce, about 12,000 people, will be asked to go. Oracle is retrenching employees in phases, said people aware of the matter.
Layoffs began last month starting with programme managers and have been happening in phases, they said. Oracle did not respond to queries.
Layoffs are more pronounced in part due to the rising adoption of AI, which can perform routine tasks efficiently.
Middle managers, freshers at risk
Teamlease Digital CEO Neeti Sharma told ET that, by 2026, about one in five companies in India could see the exit of half their middle managers as AI begins taking over routine tasks such as reporting, scheduling and performance monitoring.
While IT services and outsourcing will see the largest impact, with 30-40% of the middle management roles going as AI automates project management and client communication, this will also impact banking and finance as well as manufacturing and retail.
“Healthcare managers are least at risk (10–15%), since much of their work involves direct coordination with people, which AI is less able to replace,” Sharma said.
While not every company will see these changes, many process-heavy industries in India are likely to restructure their workforce and reduce middle management due to AI during this period, Sharma said.
Apart from middle management, any roles that are repetitive and rule-based will be impacted. “The heaviest impact will fall on the lower rungs of the labour pyramid, namely the traditional entry-level coding and back-office roles that Indian IT has relied on for scale,” said HFS Research founder Phil Ferst.
This has already come down in the last few years. While things are improving, instead of hiring in bulk from campuses, Sharma said companies are looking for candidates with specific, in-demand tech skills.
Futureproofing
While AI is playing a role, as companies adapt to the shift, these changes are more nuanced, experts said.
Vianai Systems founder and former Infosys CEO Vishal Sikka said technology is creating a sea change in the software and services industry that employs a huge workforce.
“If we don’t act on the opportunity, perhaps we will get disrupted. But the way I see it is that there is a tremendous opportunity,” said the former SAP executive.
Ferst said layoffs are less about short-term cost-cutting and more about realigning talent toward the next wave of growth areas.
“For India, this means the pyramid delivery model of low-cost coding and maintenance is eroding faster than anticipated. The demand is shifting from bulk engineering and support roles to higher-end skills in AI engineering, data science, platform integration, and business transformation,” he said.
Also Read: AI at work: Job cuts and tech leader opinions
