India's IT sector downsizes amid AI disruption
Several large employers have slashed headcount by as much as 6% in 2026.
India's IT sector is undergoing a significant downsizing as the industry grapples with disruption from artificial intelligence, according to Semafor. The Financial Times reported that several large employers in the sector have cut their workforce by up to 6% this year, with one IT worker expressing frustration at being "thrown out" by the AI tools they helped develop.
Despite being a key driver of Indian economic growth and middle-class expansion, Prime Minister Narendra Modi has downplayed concerns over job displacement. However, India's IT stock index has dropped by 18% in 2026 as the country shifts its focus towards manufacturing more consumer electronics, lagging behind in building frontier AI.
NEC, a Japanese IT giant, is also adapting to the AI-driven upheaval by opening a new department staffed entirely by AI agents.
Brief written by urgent.news from Semafor's own syndicated text. Machine-written — may contain errors; check the original before relying on it.
