Oracle this week laid off 12,000 employees, constituting 40% of its workforce in India. This is part of a worldwide retrenchment of 30,000 jobs, or 18% of the global payroll, as part of the company’s restructuring as it pivots towards investments in artificial intelligence (AI) hardware.
Job losses due to AI are usually talked about in the future tense, but the bloodbath has already begun in India. Oracle followed in the wake of Amazon which in recent months cut about 30,000 roles in two tranches, impacting an estimated 1,000 jobs in India. Indian tech services major TCS has said it will let go of 2% of its workforce, which is about 20,000 roles. Infosys, Wipro, and Tech Mahindra trimmed a total of 10,000 jobs in 2025. Other players in the tech sector have been shedding too. About 11,000 startups shut down in 2025. A government crackdown on real-money gaming resulted in companies switching to alternative operations or letting staff go. Experts estimate that up to 50,000-60,000 workers have lost jobs in the past year, not counting non-renewal of contracts, silent exits and forced resignations.
Although job losses in the tech sector are clearly shaping up to be a huge problem for India, there has not yet been an organised response to it from any of the institutional stakeholders involved. The government ought to be worried about it, not only from the standpoint of its impact on consumer spending, tax collections, and remittances from abroad, but also the social and psychological effects this will eventually bring about.
Conventionally, governments, both state and central, have favoured IT companies with indulgent labour laws, tax breaks, discounted real estate and preferred access to municipal services. Our social contract with the IT industry was primarily based on employment generation, not company valuations or accrual of wealth to shareholders. If this founding relationship is changing now and employees are being laid off by the thousands while companies become stock market leviathans with only a very small community footprint, then it is time we renegotiated the terms of the social contract.
This line of thinking has not yet permeated to policymakers in the government. It won’t if we continue to discuss IT job losses as mere news events but not as social change that needs an appropriate policy response. While the IT sector is justly celebrated as the engine of the new economy, why is it not looked over by regulatory mechanisms such as what we apply to the old industry? Decades ago, labour laws were attenuated for the benefit of the IT sector, and the government must honour that commitment. But why not have a regulator that vets the terms of severance offered to departing employees? Why not have an appeal authority that will referee any disagreements?
India needs to create a whole range of support subsystems to help people losing jobs in the IT sector, including organised referral systems, reskilling programmes for mid-level or senior professionals, counselling services, and affordable legal advice. Unfortunately, the few existing institutions that claim to be performing such functions in India invariably are company-side entities, like NASSCOM. That won’t do. That’s like asking the lion to counsel the lamb. What we need are employee unions, watchdog associations and professional guilds that will enable employees to help employees.