The tech sector is facing a wave of job cuts in 2026, with around 30,000 positions impacted so far. Experts say that artificial intelligence is accelerating changes in the industry, affecting not only IT companies but also other tech-driven roles. Data shows that automation and AI adoption are reshaping workforce needs, leaving many employees vulnerable to layoffs.
Concerns over Artificial Intelligence (AI) disrupting jobs have intensified in early 2026 as companies across the world move from pilot projects to large-scale deployment of automation tools.
Recent layoffs by global corporations have brought the debate into sharper focus. Payments firm Block said it is laying off more than 4,000 employees, or about half of its headcount. The company said the move would help it operate with smaller teams using AI to automate more work. Its shares surged over 24 per cent in extended trading after the announcement.
IT Sector Layoffs 2026
The layoffs are not limited to smaller firms. Companies such as Amazon, Meta, HP Inc, Allianz and Dow have announced job cuts linked to restructuring, automation and AI integration. In India, Australia and Europe, several firms have cited AI-driven efficiency programmes as part of workforce rationalisation plans.
Global brokerage Goldman Sachs warned that accelerating AI adoption could push US unemployment higher this year. Its economists estimated that AI was responsible for 5,000 to 10,000 monthly net job losses in the most exposed US industries last year and accounted for 7 per cent of total planned layoffs in January.
Against this backdrop, fears have risen sharply in India’s IT sector. The IT index fell 24 per cent in February and hit a two-and-a-half-year low amid concerns that AI-based coding tools and automation platforms could reduce demand for traditional IT services such as outsourcing, maintenance, testing and managed services.
But is AI a structural threat to IT jobs, or is the sector going through a transition?
What official data says
A report by NITI Aayog titled “Roadmap for Job Creation in the AI Economy”, released in October 2025, presents both risks and opportunities.
The report says that in a worst-case scenario, headcount in the tech services sector could decline from 7.5–8 million in 2023 to 6 million by 2031. In the customer experience (CX) sector, employment could fall from 2–2.5 million in 2023 to 1.8 million.
It also cites data suggesting that over 60 per cent of formal sector jobs are susceptible to automation by 2030, especially in IT and BPO.
However, the report adds that whether the industry becomes a net job creator or a net job loser will depend on the actions taken by companies and policymakers.
It identifies new growth areas such as AI in drug discovery, predictive maintenance systems, demand-based supply planning in manufacturing, convergence of Internet of Things and AI, quantum computing research, AI DevOps and expansion of Global Capability Centres.
The report also lists emerging roles including data centre controllers, AI marketing specialists, ethical AI specialists, sentiment intelligence analysts, quantum machine learning engineers and advanced AI research scientists.
Why is the fear rising
Industry experts say the immediate risk is higher for repetitive and low-skill roles.
Harsh Makwan, CEO of Hypernext Data Centre, said repetitive customer service and back-office tasks can be automated using agent-based AI systems. This could directly affect BPO revenues, which form a large part of cash flows for many IT firms.
He said building strong AI capabilities requires investment and time, and large Indian IT companies have so far not demonstrated breakthrough AI products. If traditional revenues slow, short-term investments in AI could also be affected.
Entry-level roles that involve basic coding, testing and support functions may face pressure as AI tools improve coding speed and automate routine tasks.
Why experts say IT will not disappear
Despite the risks, experts do not see a collapse of the IT sector. Dr Ganesh Natarajan, Founder of 5F World, said AI will change operating models but not eliminate growth.
He said enterprise systems are complex and built over decades. Even if AI tools can generate code or modernise parts of systems, companies still need experts to redesign processes, integrate AI tools and monitor performance.
According to him, growth may remain weak for the next three to four quarters as companies adjust. Business models could change within six to seven quarters. Companies that adapt quickly may return to steady growth, though not at earlier peak rates.
Sanskar Arora, AI expert at Dexian India, said market reactions appear driven by panic rather than structural decline.
He said previous technology shifts, such as cloud computing and digital transformation, also led to initial disruptions but created long-term value.
According to him, AI can reduce costs and improve productivity, but areas such as requirement gathering, system architecture, security compliance and end-to-end transformation still require human expertise.
He said low-skill roles may decline, especially at entry levels. However, high-skill roles in AI integration, prompt engineering, system design and orchestration are likely to grow.
He added that the net impact over time could be neutral to positive if large-scale reskilling is undertaken.
A shift in business model
Experts say the current IT services model, which relies heavily on labour-based billing and large teams for maintenance and support, may gradually change.
Companies may move towards smaller, high-skilled teams supported by AI tools. Revenue models could shift from time-and-material contracts to outcome-based or AI-led consulting models.
The next six to eight quarters are expected to be critical. During this period, companies will need to reskill employees, invest in AI research and reposition themselves in global markets.
The pace of change is also much faster than previous technology cycles. This increases short-term uncertainty in hiring and earnings.
The bottom line
Data shows that AI is already contributing to job cuts globally, particularly in roles exposed to automation. Official projections indicate potential downside risks for India’s tech and BPO sectors if adaptation is slow.
At the same time, new categories of jobs are emerging in AI research, system integration, data management and advanced engineering. Experts say AI should be seen as a tool that changes how IT services are delivered, rather than eliminating the need for IT companies.
The outcome will depend on how quickly companies reskill workers, invest in new capabilities and shift from traditional outsourcing models to AI-led integration and consulting services.
For now, the sector appears to be in a transition phase. Whether AI becomes a net threat or a net opportunity for IT jobs will be determined over the coming years.
FAQ: 30,000 Tech Jobs Lost in 2026 – AI’s Role in IT Job Cuts
Q1: How many tech jobs have been affected in 2026 so far?
A1: Around 30,000 positions in the tech sector have been impacted by layoffs so far in 2026, affecting both IT companies and other tech-driven roles.
Q2: What is causing these layoffs?
A2: Experts attribute the layoffs primarily to the accelerating adoption of artificial intelligence (AI), automation, and restructuring. AI tools are automating routine tasks, which reduces the need for repetitive, low-skill jobs.
Q3: Which companies have announced major layoffs?
A3: Global companies like Block (laying off over 4,000 employees), Amazon, Meta, HP Inc., Allianz, and Dow have all announced job cuts, citing automation, AI integration, and business restructuring.
Q4: How has AI affected the IT sector specifically?
A4: AI tools, especially in coding, testing, and back-office operations, are automating many entry-level IT roles. This has contributed to a 24% drop in the IT index in February 2026, reflecting investor concerns.
Q5: Are these layoffs limited to low-skill roles?
A5: Mostly yes. Entry-level positions in coding, support, and testing are at higher risk. High-skill roles in AI integration, system design, and advanced engineering are less likely to be impacted and may even grow.
Q6: What does official data say about AI and job risk?
A6: A NITI Aayog report predicts that, in a worst-case scenario, the tech services sector in India could shrink from 7.5–8 million employees in 2023 to 6 million by 2031. Over 60% of formal sector jobs are susceptible to automation by 2030, particularly in IT and BPO.
Q7: Are there new opportunities emerging from AI adoption?
A7: Yes. New roles are emerging in AI research, ethical AI, quantum computing, data center management, AI DevOps, sentiment intelligence, and AI-driven manufacturing and supply chain.
Q8: Will the IT sector collapse due to AI?
A8: Experts do not foresee a collapse. AI is expected to change operating models rather than eliminate growth. Enterprises will still require skilled humans to integrate, monitor, and optimize AI tools.
Q9: How will business models in IT change?
A9: Companies may shift from large, labour-intensive teams to smaller, high-skilled teams supported by AI. Revenue models may transition from time-and-material contracts to outcome-based or AI-led consulting services.
Q10: What can employees do to stay relevant?
A10: Reskilling is critical. Employees should focus on AI-related skills, system design, prompt engineering, and advanced data analytics to adapt to the changing landscape.
Q11: What is the overall outlook for tech jobs in India?
A11: The sector is currently in a transition phase. AI may cause short-term layoffs but also create new opportunities. The net impact will depend on how quickly companies invest in AI capabilities and reskill their workforce.
