Silent Layoffs Surge Across India's Tech Industry as AI Reshapes Work; IT Sector Could See 35,000 Job Cuts: Report
India’s IT sector may cut up to 35,000 jobs in 2026 through "silent layoffs" as firms prioritise productivity and AI integration. The industry is moving from pandemic-era hiring to structural realignment, focusing on specialized roles while automating routine positions to gain operational efficiency.
India’s technology and software services industry is undergoing a significant workforce realignment, with approximately 35,000 roles potentially facing elimination throughout the 2026 calendar year. Unlike the highly publicised layoffs seen in previous years, this current wave is characterised by "silent layoffs," where companies streamline operations through performance reviews and skill assessments rather than formal, large-scale announcements.
Industry Restructuring and Silent Layoffs
The current phase of rationalisation follows the massive hiring surge observed during the pandemic, as companies now look to prioritise productivity in an increasingly competitive global environment. As per a report by The Times of India, staffing firm TeamLease estimates that between 10,000 and 15,000 technology professionals had already been affected by these silent exits by May 2026. This trend marks a shift from correcting past over-hiring to a more permanent reshaping of organisational structures. Layoffs in US: Job Cuts Drop 40% in 1st Half of 2026; AI Remains Primary Driver.
Drivers of Workforce Realignment
The restructuring is largely driven by advancements in artificial intelligence, which are enabling greater productivity and reducing the necessity for manual, routine tasks. As per a report by The Times of India, industry executives highlight that companies are actively eliminating redundant positions, overlapping responsibilities, and excessive management layers. While headcount is being reduced in traditional roles, firms are simultaneously continuing to recruit for specialised, "future-ready" positions in areas such as cloud computing, cybersecurity, and artificial intelligence. Tech Layoffs 2026 Affect Nearly 1,20,000 Employees.
Structural Shift in IT Value
Industry experts suggest that the technology sector is moving away from a business model centred on "labour scale" and towards one built on "cognitive leverage." The impact of this shift is evident in the performance of major Indian IT firms; for instance, the five largest companies recorded a combined net reduction of 7,389 employees in the 2026 fiscal year. While the workforce transition is challenging for many, analysts view these changes as a necessary evolution as companies integrate automation to maintain competitiveness in the AI era.
(The above story first appeared on LatestLY on Jul 12, 2026 08:59 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).