India’s AI-driven tech layoffs could shatter middle class dreams

India’s AI-driven tech layoffs could shatter middle class dreams
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Tata Consultancy Services (TCS), India’s largest IT services firm, plans to cut over 12,000 middle and senior management jobs, reducing its workforce by 2%, BBC News reported. This reflects major changes in India’s $283 billion software industry, which has long relied on low-cost skilled labor for global clients. TCS aims to become “future ready” by investing in new technologies and scaling artificial intelligence (AI) amid disruptions to its traditional business model.

AI is automating routine tasks and shifting client demands toward innovation rather than cost-cutting. Although hiring in AI, cloud, and data security is rising, it lags behind layoffs. Experts highlight a skills gap, with only 20% of India’s IT professionals skilled in AI, despite a need for one million AI experts by 2026.

The IT sector’s slowdown, worsened by US tariffs and cautious spending, has led to 50,000 job losses last year and a sharp drop in new hires. This threatens India’s middle-class growth and broader economy, as IT jobs have historically driven urban prosperity and consumption.