India's IT sector downsizes amid AI disruption

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India’s world-leading IT sector is downsizing, facing mass disruption by AI.
Several large employers have slashed headcount by as much as 6% this year, the Financial Times reported: “The tool that we gave our sweat, blood and bones to — it threw us out,” said one IT worker.
The industry is one of the key drivers of Indian economic growth and middle-class expansion, and Prime Minister Narendra Modi has played down job displacement concerns. But India’s IT stock index has dropped 18% in 2026, as New Delhi, which lags in building frontier AI, pivots to manufacturing more consumer electronics.
It’s not alone in the AI-driven upheaval: Japanese IT giant NEC is opening a new department staffed solely by AI agents.

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