The Indian IT industry, once an emblem of upward mobility and economic aspiration, is now being rapidly reshaped by artificial intelligence.
Job losses across major firms are not isolated events ~ they represent a structural shift in the very nature of whitecollar employment in India. The middle and senior managerial roles that once formed the backbone of urban affluence are being hollowed out by automation and efficiency-led restructuring. India’s software services sector, which contributed massively to GDP and urban consumption growth, thrived on the availability of cheap, skilled labour and predictable outsourcing demand from Western clients. Today, those fundamentals are no longer secure. AI is automating routine coding, testing, and back-end processes faster than companies can reskill their workforce. In the face of this upheaval, reskilling programmes, however well-intentioned, are lagging behind the scale of displacement.
The speed at which AI is transforming workflows has caught even seasoned industry veterans off guard. The tools now available can do in seconds what once took teams hours. This mismatch has exposed a deep vulnerability: India’s services-led growth was heavily reliant on the volume hiring of generalists. As the demand for specialists in AI, data security, and cloud architecture rises, the majority of the existing IT workforce finds itself underprepared. Even with the influx of investment in AI training, companies are forced to lay off thousands of employees simply because they are not “deployable” in the new technological paradigm. The implications extend far beyond the tech corridors of Bengaluru and Hyderabad. White-collar job security helped fuel India’s real estate markets, auto sales, education loans, and the broader consumer economy.
With job additions in top IT firms dropping by over 70 per cent and layoffs becoming routine, the socio-economic ripple effects are already being felt. Middle-class aspirations ~ built on the promise of stable IT jobs ~ are beginning to crack. This disruption comes at a time when global economic pressures, including protectionist trade policies and reconfigured sourcing strategies by major Western clients, are further constraining Indian IT’s growth prospects. As AI adoption accelerates abroad, Indian firms are being pressured to deliver more with fewer people, threatening their traditional cost arbitrage advantage. The new emerging sectors ~ fin-tech, global capability centres, and startups ~ cannot absorb the displaced workforce at the scale the old IT giants once did.
These sectors offer innovation, yes, but not mass employment. Consequently, a significant share of fresh graduates may find themselves jobless, facing not just unemployment but irrelevance in a rapidly changing market. Unless India orchestrates a coordinated push to upskill at scale, rethink its economic diversification, and prepare its educational institutions for an AI-first future, the foundation of its middle-class story will continue to erode. The promise that the IT sector once held ~ that talent could transcend circumstance ~ risks being lost in translation, rewritten by algorithms indifferent to social mobility.