Across the globe, companies are slashing roles in the name of efficiency and automation, reshaping the workforce faster than reskilling programmes can keep up
Big tech giants in the country and Indian founders, watching these Silicon Valley playbooks, now also cite these precedents to justify minimising roles amid shaky funding numbers
While junior roles vanish, demand for AI orchestrators and model reliability engineers is skyrocketing
When ChatGPT swept the global shores in late 2022, many thought that the nascent tech would usher in a new era of opportunities and jobs.
Cut to 2026, in boardrooms from Seattle to Bengaluru, AI is increasingly becoming the reason employees are being shown the door.
Across the globe, companies are slashing roles in the name of efficiency and automation, reshaping the workforce faster than reskilling programmes can keep up.
At the forefront of AI-led automation are big tech giants like Amazon, Oracle, Atlassian and Salesforce. Recently, these tech majors have fired thousands of their employees to invest in AI infrastructure, as well as fund data centre expansions.
The efficiency-first mandate emerging from Silicon Valley is now crossing borders, pushing Indian startups to choose between preserving headcount and transitioning to leaner, AI-native operations. This fallout is hitting everyone, including Indian startups and unicorns.
These firms are pivoting towards workflows where AI bots now handle a majority of operations and customer support tasks that once required massive entry-level teams.
Then, there are India’s bellwether IT services giants that seem to be grappling with a double whammy. As if the fears of a “SaaSpocalypse” were not enough, automation-fuelled layoffs have sent the stock prices of companies like TCS (down nearly 24% YTD) and Tech Mahindra (down 15% YTD) into a downward spiral.
And this issue is not limited to just smaller companies.
So, how exactly are the world’s most powerful tech firms and Indian startups justifying these mass layoffs?
Global Precedent Sets The Tone
Global big tech’s explicit embrace of AI as a layoff rationale has effectively normalised workforce reductions. And it is visible in numbers across the board.
While Amazon cut 16,000 roles globally in January, Meta axed 1,500 jobs at Reality Labs within the same month to redirect metaverse spending to AI priorities. Oracle and Accenture, too, have cut thousands of jobs.
Big tech giants in the country and Indian founders, watching these Silicon Valley playbooks, now also cite these precedents to justify minimising roles amid shaky funding numbers. As a result, homegrown startups no longer view staff reductions as a sign of failure, but as a mandatory structural recalibration to court cautious venture capitalists.
For instance, home interior unicorn Livspace, which recently saw cofounder Saurabh Jain and CBO Lalit Mittal departalso cut nearly 1,000 jobs earlier this year to transition into an AI-native company. Troubled Ola Electric was also letting go of its 5% workforce to optimise front-end operations via AI-led efficiencies.
On the big tech front, Jira parent Atlassian said that it would lay off roughly 1,600 employees, with India accounting for 16% of the impacted employees. Amazon India too is firing 500+ employees as part of its global retrenchment exercise, primarily impacting tech and HR teams.
Roles On The Chopping Block
Amid the humdrum, there is an underlying pattern beneath all these AI-induced layoffs – slash routine functions (HR, operations, basic analytics) to fund AI infrastructure and high-skill hires.
The automation axe is falling hardest on repetitive cognitive roles such as entry-level positions in manual testing, technical support and basic coding. Junior developers who once spent their days writing boilerplate code or debugging routine scripts are finding their roles subsumed by copilots and specialised agentic frameworks.
Similarly, basic data entry roles, once the bedrock of India’s BPO sector, are being replaced by multimodal AI that can process images and text at a fraction of the cost.
While junior roles vanish, demand for AI orchestrators and model reliability engineers is skyrocketing. These professionals are tasked with managing the hallucinations of AI agents and integrating disparate LLMs into a cohesive business workflow.
A 2025 report by consultancy firm PwC revealed that employees with AI skills commanded a 56% salary premium over traditional software roles. In effect, the era of volume-based hiring is passé, replaced by a hunt for engineers who can steer a fleet of AI agents. But all this is coming at a cost.
The Automation Anxiety
The efficiency mandate is also triggering a major anxiety in India’s tech hubs as concerns persist among employees about the eventual automation of their roles.
A study by recruitment agency Randstad’s Workmonitor showed that four in five surveyed workers were concerned about AI impacting their daily tasks at the workplace, with Gen Z among those most concerned.
Speaking with Inc42 earlier, many companies said that they were tackling anxiety around job role relevancy by offering certifications, peer-led knowledge-sharing sessions, and real use case demonstrations to build confidence and clarity.
However, a new set of issues is also beginning to prop up. Employees are increasingly being told to use AI for everything, only to find that they spend more time fixing generic AI outputs than they would have spent doing the work from scratch.
This hidden labour is rarely accounted for in productivity metrics, even as managers demand higher output based on flawed assumptions of the AI-led efficiencies.
Making matters worse is the growing obsession of startup boardrooms with revenue-per-employee. As a result, founders are facing increased pressure to prove that their startups are AI-native and getting the most out of these AI tools.
As the line between human creativity and machine output blurs, corporate India is facing a quiet crisis of purpose.
But will AI be the force multiplier or an excuse to lay off employees in droves?
Only time will tell.
Edited by: Akshit Pushkarna
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