What 'Silent Layoffs' Really Mean
Unlike the mass layoff announcements of previous years, 2026 is defined by a quieter, more insidious trend. Staffing firms estimate that India's tech sector could eliminate up to 35,000 jobs this year through 'silent layoffs'. This isn't about large-scale
firings but a steady, invisible churn. Companies are using performance improvement plans (PIPs), role redundancies, and forced resignations to trim their workforce without public announcements. After a period of massive hiring during the pandemic, companies are now restructuring, but the new driver isn't just correcting over-hiring; it's a structural shift. The focus has moved from addressing slowing demand to reaping productivity gains, often linked to artificial intelligence and simplifying organisational layers. This approach avoids negative headlines and widespread panic but leaves employees feeling isolated and insecure.
The AI Productivity Paradox
Globally, AI was pitched as a growth driver. For the Indian IT services industry, however, it's increasingly becoming a structural challenge. A recent HSBC report highlighted that AI is making software engineering, testing, and maintenance more efficient, which directly reduces the need for billable hours—the lifeblood of the Indian IT model. This creates a paradox: clients demand that these AI-driven productivity gains be passed on to them in the form of lower prices. This puts a deflationary pressure on revenue for core IT services. As a result, even as companies invest in AI capabilities, they are not seeing enough new work to offset the pricing pressure on their existing contracts. This leaves the industry caught between AI-led productivity demands from clients and a slowdown in discretionary tech spending.
From Headcount to 'Skill Count'
The game is no longer about employing the largest number of engineers. The new focus is on 'skill count'—having talent proficient in high-demand areas like AI, machine learning, cybersecurity, and cloud computing. While thousands of traditional roles are being quietly eliminated, hiring continues for these specialised skills. A NASSCOM report highlights a significant gap: while the demand for AI talent in India is projected to cross one million by 2026, the supply of skilled professionals is critically low. This has led to a situation where nearly 51% of AI/ML roles remain unfilled. Companies are shifting from a model of hiring freshers at scale to a more targeted approach, prioritising demonstrable skills and certifications over general degrees. A joint report from NASSCOM and Indeed found that 40% of employers now prefer skills or certifications over a traditional degree.
Navigating the New IT Landscape
For the individual IT professional, this new environment demands a strategic shift from being an employee to being a lifelong learner. The anxiety is real, with one NASSCOM report noting that 42% of employees feel anxious about AI disrupting their jobs. The path forward lies in proactive upskilling. The same report indicates that employees who acquire AI skills can see their career prospects enhanced. This means moving beyond company-provided training and taking ownership of one's skill development. The focus should be on acquiring practical, project-based experience in emerging technologies. The era of stable, long-term employment based on a single skillset is fading. The future belongs to those who can continuously adapt, learn new technologies, and prove their value in a workplace where human and AI capabilities are increasingly intertwined.
