Fear of layoffs grips IT industry

Bengaluru: “There was a constant fear that an email from HR could land any day. One day, it did. I was called to the office the next morning, completed my exit formalities, and just like that, years of hard work meant nothing.” Supriya (name changed), in her late 30s, an operations manager at Amazon Web Services, said. She brings over 13 years of IT experience from Accenture, Infosys, and HCLTech.

She joined Amazon in November 2024 on a Rs 50 LPA package. In January 2026, she was impacted in the company’s third round of layoffs.

Layoff anxiety has gripped the IT workforce for over a year, sharpening in the past six months. Macro headwinds, cuts in client spending, AI deflation, and a shift away from the traditional hiring pyramid are reshaping an industry in the middle of an AI-led transformation.

DH spoke to employees recently laid off from TCS, Amazon, and Oracle — many of whom had completed all mandatory AI certifications and upskilling programmes. They requested anonymity since final settlements are still pending.

In September 2025, Sumit, in his early 40s, was laid off from Oracle, where he worked for close to a decade. Unlike the recent layoff that cut about 12,000 jobs in India, there were no rumours of pink slips then — the news came as a shock.

Oracle eliminated at least 3,000 roles that month as part of a restructuring to accelerate its AI expansion. Since then, Sumit has sent around 50 applications, but received no callbacks. “Forget interviews, the job market is so bad that we aren’t even getting calls,” he said. He believes severance pay should be tax-free: “We could survive two or three more months with that money.”

DH spoke to other laid-off employees who shared similar experiences — no callbacks despite upskilling. Sumit used the break to earn DevOps certifications, but it hasn’t led to offers. “I’ll give it one more year. If nothing works, I have to think of other options. Even teaching crossed my mind,” he said.

“We worked in the company for 10-15 years. At least conduct a call and announce layoffs, instead of just sending an email,” said another laid-off employee, now struggling with home and car loans.

Since layoffs can come without warning, anxiety is widespread. “We all discuss this at the office and are very uncertain about the future,” said a quality analyst at an IT services firm.

Beyond formal layoffs, companies are also pushing voluntary attrition — HR heads call employees and ask them to resign.

In the March quarter, Cognizant, which announced layoffs, modified its definition of ‘Voluntary Attrition — Tech Services’ to exclude certain categories of negotiated separations.

According to Layoffs.fyi, which tracks tech layoffs, globally, over 92,000 tech employees have been laid off so far in 2026 alone. Though India numbers alone are not available since companies do not break down layoffs according to countries, company filings indicate that thousands of techies lost jobs in FY26.

A Nasscom report suggests that the Indian IT-BPM industry employs over 5.8 million people.

HR experts said the IT industry was over-hired during the Covid period and now that they are restructuring and investing more in AI, layoffs will continue to happen. Meta will lay off 10% of its workforce or about 8,000 employees and a major restructuring is scheduled for May 20.

International media reports highlighted that Meta CEO Mark Zuckerberg acknowledged that his company’s spending on AI has contributed to layoffs at Meta. According to reports, Microsoft will offer voluntary retirement to thousands of employees.

Is AI really to blame?

There is no denying that AI is impacting industries at different speeds, said Aditya Singh, Founder at Benevolve, a HR tech platform.

“We are living through one of the fastest transformations of work since the Industrial and Internet Revolutions, both of which reshaped how companies operate and how people work, while driving economic growth. The difference now is speed: what took nearly 80 years during the Industrial Revolution and about 15 years during the Internet era is now expected to occur in less than five years,” he said.

He added that this is a classic transformation cycle displacement followed by reinvention and job creation, but accelerated.

“Organisations are restructuring for short-term efficiency, often leading to layoffs, which in some cases are necessary. However, the bigger issue is how decisions are made. Many companies lack clarity on future capabilities and don’t have the data to assess their workforce effectively. Without a granular understanding of skills, especially meta-skills, redeployment becomes difficult, making layoffs a default rather than a strategic choice,” he said.

Many laid-off employees completed upskilling programmes and earned AI certifications, yet interview calls remain scarce. Supriya, who holds two AI certifications, said, “If certifications really helped, I would have a job by now. So many people have upskilled, but where are the jobs? After 13-15 years in IT, you can’t just switch to industries like manufacturing. Mid-level employees face too many barriers.”

Whether AI-led restructuring is targeting mid-level employees? Sonica Aron, Founder of AI advisory firm Marching Sheep, said mid-level roles are particularly impacted because they traditionally sit in coordination and execution layers— areas now being augmented or streamlined by AI.

However, this is not a limitation of capability, but often of adaptability. Those who proactively evolve — by building adjacent skills, embracing new tools, and shifting from task execution to problem-solving — continue to stay relevant, Aron said.

However, Ankush Sabharwal, Founder and CEO of CoRover.ai, has a different view. According to him, mid-level professionals are actually sitting on the biggest opportunity in this AI era.

“Instead of a team of ten, two well-coordinated professionals who know how to prompt, review, and orchestrate AI effectively can deliver superior outcomes for senior leadership. The coordinator who masters AI tools becomes exponentially more valuable than a large technical team working without them. This is a transitional phase. Mid-level managers who proactively recruit AI agents, augment their teams’ capabilities, and drive efficiency will become indispensable. Middle managers who ignore AI will not lose their jobs to AI, they will lose them to another middle manager who knows AI and has adopted it well at work,” he stated.

He added that the future rewards those who lead with AI, not those who resist it.

As IT services firms roll out AI tools, clients are demanding AI-led delivery — forcing teams to downsize. “This is happening across the industry. We were a 10-member team, but after adopting AI tools, our client asked us to reduce the headcount,” said an IT employee. Tech firms are now cutting jobs to fund AI infrastructure investments.

AI certifications may open doors into new hiring funnels, but are not an insurance to secure the current job, said Kamal Karanth, Co-founder, Xpheno — a specialist staffing firm.

Vector of a robot hand pushing dominoes while businessman runing away from falling effect. Human vs AI concept Artificial Intelligence Unemployment Risk Business Illustration

The current buzz among enterprises is for the services-end of AI, and not as much in the core-engineering-end. India is an AI services market, while the largest parts of core-AI engineering are happening abroad.

So the ability of talent to stay relevant in the AI funnel also depends on which end of the AI spectrum is the enterprise interested in and investing into. As much as AI is a leveller or sorts, it can also be a sharp differentiator among similar-looking profiles travelling at different velocities in a hiring funnel, he added.

Not the best time for techies

The tech jobs market continues to remain sluggish, with most talent-acquiring sectors going conservative and cautious on expanding tech capacity. Post the hiring buoyancy of 2021, the Indian tech sector has not had a period of stability extending beyond a quarter, said Kamal Karanth.

“The sector continues to be periodically hit by global events and occurrences in key client markets. As a manpower dependent sector, frequent shake-ups and resultant instability has long-term impact on the workforce and future talent pools. With active tech openings remaining on a trajectory of uncertainty with high elasticity, it is not the best time for techies to venture out into the job market,” he said.

For the near-term, it would be prudent to wait for opportunities, if any, to come calling and in the meantime invest in AI-proof skill sets to be future-ready.

Gaurav Gupta, Senior Vice President – Engineering, Aziro, said that employers are looking for applied capability—how well candidates can solve real business problems using AI. “There is also a mismatch between what candidates learn and what enterprises need, especially in areas like integration, domain context, and scalability. Candidates who combine AI knowledge with industry understanding and execution experience are seeing better outcomes,” he added.