Tech Explained: Here’s a simplified explanation of the latest technology update around Tech Explained: AI propels layoffs in tech sector; companies focus on reskilling in Simple Termsand what it means for users..
Adoption of AI by companies File photo
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.
An EY study published earlier this year found that 24% of tasks in the technology sector can be fully automated, while time spent on another 42% can be significantly reduced—freeing up 8–10 hours per week for corporate employees.
Cost optimisation
IT companies argue that retrenchment is largely driven by cost optimisation enabled by AI and ML. According to EY India’s report, The AIdea of India 2025, OpenAI’s GPT API costs have fallen by nearly 80% over the past two years.
AI adoption is no longer limited to IT, with sectors such as banking and financial services (BFSI), manufacturing, logistics, and healthcare also increasingly deploying the technology.
“In non-tech sectors, the impact is even more significant,” said Nipun Sharma, CEO of TeamLease Degree Apprenticeship. “Manufacturing is a clear example. AI is being used for predictive maintenance, quality inspection, production planning, and supply-chain optimisation. This is creating demand for technicians, supervisors, and engineers who can work with AI-enabled systems on the shop floor. Jobs are not disappearing, but skill expectations within existing roles are rising sharply.”
Redistribution of roles
Sanketh Chengappa, Director and Business Head (Professional Staffing) at Adecco India, said over 60% of BPOs and IT services firms have deployed robotic process automation (RPA) and AI to automate tasks such as data entry and HR onboarding, displacing manual roles. “On average, more than 30,000 AI and ML roles were posted each quarter, with AI-related positions recording combined growth rates exceeding 50% across industries,” he said.
Sachin Alug, CEO of NLB Services, estimated that nearly two million tech jobs could be displaced by 2030, while about four million new AI-enabled roles may be created—indicating net employment growth if reskilling keeps pace.
“AI has not resulted in absolute job losses; instead, it has triggered a redistribution of roles across sectors,” said Sonal Arora, Country Manager at GI Group Holding. “While routine and repetitive tasks are increasingly automated, new roles have emerged that require close collaboration between humans and AI—especially in technology, financial services, consulting, and shared services.”
The World Economic Forum estimates that by 2030, AI and related technologies will create 170 million new jobs globally while displacing 92 million, resulting in a net gain of 78 million jobs. For India, with its large working-age population, Arora said the transition presents both an opportunity and a risk, with employment outcomes hinging on the speed and scale of reskilling and workforce readiness.