AI May Eliminate 35,000 IT Jobs in India This Year Amid Workforce Restructuring

India’s information technology (IT) sector could witness the elimination of nearly 35,000 jobs this year as companies increasingly adopt artificial intelligence (AI) and automation to streamline operations. According to a report by The Times of India, many IT firms are resorting to “silent layoffs” through hiring freezes, non-renewal of contracts, performance-based exits and workforce restructuring, instead of announcing large-scale job cuts publicly.

AI Reshaping Traditional IT Roles

The increasing use of generative AI, automation platforms and AI-powered coding tools is changing demand for several traditional technology roles. Functions such as software testing, routine coding, technical support and maintenance are among those expected to witness the greatest impact as repetitive tasks become increasingly automated.

Companies are simultaneously investing in AI capabilities, cloud technologies, cybersecurity and data engineering, creating demand for professionals with specialised digital skills. As a result, hiring patterns are shifting from volume recruitment to targeted recruitment in emerging technology areas.

Hiring Slowdown Accompanies AI Push

The workforce restructuring comes at a time when India’s $315-billion IT industry is facing slower client spending, delayed technology projects and changing business priorities. Several leading IT companies have adopted a cautious hiring strategy while focusing on improving productivity through AI-driven solutions.

Globally, technology companies have also reduced their workforce this year as they redirect investments toward artificial intelligence infrastructure and AI-enabled products. More than 120,000 technology jobs have reportedly been cut worldwide in 2026 amid this transition.

Reskilling Becomes Critical

Experts believe the ongoing transformation highlights the growing importance of continuous upskilling. Professionals with expertise in artificial intelligence, machine learning, cloud computing, cybersecurity, data science and AI governance are expected to remain in high demand despite the broader slowdown in traditional IT hiring.

Industry leaders have repeatedly emphasised that while AI may automate repetitive work, it is also creating new opportunities requiring advanced technical and analytical skills. Companies are therefore expected to increase investments in employee reskilling and internal talent development to meet evolving business needs.

Industry at a Turning Point

The projected reduction of around 35,000 jobs signals a significant transition for India’s technology services industry. While AI is expected to improve productivity and create new business opportunities, it is also accelerating changes in workforce requirements, making skill adaptation increasingly important for professionals seeking long-term careers in the sector.