AI, layoffs, and the future of tech talent in India

Over the past six months, global technology giants such as Amazon, Intel, Meta, and more recently Oracle, have undertaken workforce restructuring, leading to job losses across key regions where they have a significant presence. In India, too, this number is estimated to run into the thousands. Among Indian IT services firms, headcount trends have been mixed since the start of the current fiscal year. Tata Consultancy Services (TCS), the country’s largest IT employer with a workforce of over six lakhs last year, has seen its employee base decline by nearly 31,000. Tech Mahindra , which is working to turn around its fortune, has reported a reduction of over 3,500 employees in the past three quarters.  

At the same time, other tier-1 IT companies that have added employees have done so only marginally. On the talent front, the IT services sector is undergoing a structural shift, with companies reshaping their workforce pyramid, repurposing existing talent through reskilling initiatives, and increasingly leveraging artificial intelligence (AI) to augment productivity. 

Roles now becoming redundant are largely those created during the excess capacity build-up in the pandemic-led hypergrowth phase, as well as those involving repetitive or basic tasks—such as coding, QA testing, documentation, and customer support—which AI agents can now execute more efficiently. Sanju Ballurkar, President – Experis,  Manpower Group, who sees the current phase as less of a contraction and more of a structural shift in the talent landscape, said, “Mid-management roles, particularly those focused on coordination, reporting, and non-core operational oversight, are being rationalised as organisations move toward flatter, more agile structures. There is also a visible decline in demand for legacy system maintenance roles and low-value analytics functions, as companies prioritise modern, scalable technology stacks.”    

Shift to AI + human model  

While accelerated job losses globally due to AI are being seen because of lack of preparedness in actively pursuing reskilling, on both the employer and employee fronts, India’s tech landscape appears relatively better positioned. Earlier this year, industry body Nasscom estimated that the Indian tech sector undertook large-scale skilling initiatives in FY26, with over 2 million professionals upskilled in AI, including 2–3 lakh in advanced AI capabilities.  

Sindhu Gangadharan, Chairperson, Nasscom, said the industry’s focus is on building ‘Human + AI’ teams, investing in continuous skilling and converting efficiency gains into growth, creating new jobs, and new career pathways even as delivery becomes more agile and more resilient.  

Global Talent Trends 2026 report by Mercer, based on a survey of C-suite executives, HR leaders, investors and employees worldwide—including 650 respondents from India—highlights a strong shift towards AI-led transformation in the country. The report found that 54% of India’s C-suite leaders expect AI to primarily drive business transformation and innovation over the next two years, compared with 42% globally. Additionally, 66% of HR leaders in India are planning to redesign work to optimise human-machine collaboration. It also underscored the urgency of aligning skills with organisational goals. Talent scarcity was seen as a relatively lower concern in India at 42%, compared to 54% globally, with leaders instead focusing on the need to transition to skill-powered talent strategies. Nearly 74% of India’s C-suite seen adopting a skills-first approach as a top priority, ahead of the global peers of 63%. 

As job losses dominate headlines, Kapil Joshi, CEO of IT Staffing at Quess Corp, said that while discussions around AI and jobs tend to go to extremes, the hiring industry is seeing a far more practical approach. “From an industry standpoint, demand has not slowed; it has become far more selective and capability led. In fact, more than 50% of current job demand is now driven by emerging skills such as AI, cloud, and platform engineering. We are seeing strong hiring momentum in specialised roles such as Generative AI engineers, ML ops professionals, cloud platform and security engineers, as well as in engineering leadership roles that can drive AI-led transformation, with leadership roles themselves increasing from 15% in 2024 to 20% in 2025,” Joshi said.  

Tech roles and pay packages   

With IT/ITES industry recalibrating it talent to the new tech cycle, the expansion of the Global Capabilities Centres (GCCs) in India is not only cushioning but also expanding the demand for tech talent. In fact, according to industry estimates, in 12-18 months GCCs have surpassed traditional IT sector in hiring, with demand concentration still largely in key tech hubs such as Bengaluru, Delhi NCR, and Hyderabad, where companies are building R&D hubs and AI capabilities to serve global customer base. GCC’s are also leading in mid-level hiring, increasing from 40% to 60-65%. Entry-level hiring has been reduced by 30-35%, according to Quess Corp data.   

According to the latest Adecco India Salary Guide 2026 survey, among professionals, there is also a considerable optimism in finding new job, with 42% of the respondents saying that they are actively looking for new opportunities. Especially in tech sector, pay packages of those with niche or high-skilled like in AI/ML, Cloud, Cybersecurity can command a 20-40% premium.  

Even as demand for niche skills rises and organisations are willing to pay a premium for such talent, hiring cycles are becoming longer. Companies are now far more rigorous in assessing candidates’ capabilities and fit. “While standard roles are still being closed in 45-50 days, roles in AI/ML, cybersecurity, and complex engineering are taking 75-90+ days, compared to 45-60 days earlier. Compensation trends are also becoming more differentiated, with professionals in emerging skill areas continuing to command strong premiums, reflecting the clear gap between generic and high-demand talent, with GenAI talent seeing 15-20% higher compensation and going up to 30-40% premiums in niche cases,” Joshi said.