AI propels layoffs in tech sector; companies focus on reskilling

As artificial intelligence (AI) adoption accelerates, India’s information technology (IT) and start-up sectors are undergoing a period of upheaval marked by job cuts and growing uncertainty over the future role of programmers and coders.

Recently, IT industry veteran and Infosys co-founder N R Narayana Murthy said modern technologies would eliminate routine roles in the sector. Echoing this view, the Economic Survey 2024–25 noted that emerging technologies pose both threats and opportunities for labour markets worldwide.

With companies increasingly focusing on machine learning (ML), the sector is expected to see the elimination of mundane roles such as data entry and basic coding. Automating routine tasks helps firms reduce recurring manpower costs by replacing them with one-time capital investments in technology.

India’s largest IT services provider, Tata Consultancy Services (TCS), undertook a major resizing exercise this year, announcing plans to lay off 2% of its workforce, or about 12,000 employees. However, employees and IT unions alleged that nearly 38,000 staff were terminated in the second quarter. TCS said in a statement that it has so far laid off around 6,500 employees.

In April, reports suggested that Infosys laid off nearly 800 freshers—onboarded in October 2024—from its Mysuru campus for failing internal assessments, though the company denied the claims. In October, quick-commerce platform Zepto reportedly laid off 300 employees, with nearly 1,000 jobs lost since the start of the year. Ola’s AI arm, Krutrim, has also laid off close to 200 employees in 2025, including about 50 from its linguistics team, as part of a strategic realignment.

According to staffing firm Xpheno, nearly 7,700 senior professionals in the IT industry lost their jobs between mid-2024 and mid-2025 due to AI adoption, automation, economic pressures, and overhiring during the COVID-19 pandemic.