India’s technology services industry is on course to shed between 25,000 and 35,000 positions this year, according to staffing firms TeamLease and CIEL HR, as companies accelerate a structural shift away from pandemic-era overhiring toward AI-driven productivity. The cuts, largely executed through silent, performance-linked exits rather than public layoff announcements, follow approximately 22,000 job losses in 2025 and bring the two-year total to as much as 43,000. Unlike the previous year’s correction of excess headcount, the 2026 wave targets overlapping roles, redundant management layers, and tasks susceptible to automation.

The restructuring reflects a global bifurcation in labour demand. Viewed from Mumbai, the Indian IT sector’s move is not a demand-led contraction but a realignment: firms continue to recruit for “critical, future-ready roles” even as they eliminate routine positions. In Russia, analysts report that sectors dependent on human interaction—healthcare, education, and personal services—saw vacancy growth of 46–51% in early 2026, while IT and manufacturing face a potential 15% reduction in workforce needs from existing AI tools. Generative AI alone could compensate for nearly 60% of the IT sector’s talent deficit, according to Moscow-based HR platform analysts, signalling a redistribution of roles rather than their wholesale disappearance.

Demand for specialists who can design, secure, and deploy AI systems is intensifying across emerging and advanced economies alike. In Indonesia, cybersecurity specialists command monthly salaries of Rp15–35 million, and AI engineers are among the most sought-after professionals. Brazilian firms report acute shortages: eight in ten companies struggle to hire qualified staff in AI, data science, and cybersecurity, with starting salaries of R$8,000–12,000. Yet the wage premium for AI skills is compressing—from an average 31% top-up in 2022 to 11% in 2026, according to Russian data—as such competencies become baseline requirements rather than differentiators.

The immediate test of this transition arrives with the June-quarter earnings of India’s largest IT services firm, Tata Consultancy Services. Analysts in London and Mumbai expect flat sequential revenue, margin pressure from wage hikes and AI investments, and a deal pipeline of $8–10 billion. Commentary on AI revenue traction, client spending on discretionary initiatives, and the pace of workforce rebalancing will signal whether the current job cuts represent a one-time correction or the beginning of a sustained compression in traditional IT services employment.