Business

Tech Layoffs 2026 in India: Why Freshers Are Struggling and What to Do Next

athul@mailercloud.com

India’s technology job market is changing quickly in 2026.

Large IT companies are using more artificial intelligence and automation. At the same time, clients are asking technology firms to deliver projects faster and at lower costs.

As a result, traditional hiring models are changing.

For experienced workers with AI, cloud, data and other specialised skills, new opportunities are still being created. However, freshers and entry-level candidates are facing a much tougher job market.

So, are AI and layoffs destroying tech jobs in India?

The answer is more complicated than it may appear.

What’s Happening to Tech Jobs in India in 2026?

India remains one of the world’s largest technology and IT services markets.

However, companies are becoming more careful about hiring.

Earlier, large IT firms often recruited thousands of engineering graduates and trained them after joining. Now, companies are increasingly hiring based on specific projects and skills.

In addition, AI tools can perform some basic coding, testing, support and data-related tasks that were previously given to junior employees.

Therefore, companies may not need the same number of entry-level workers for certain jobs.

Are Tech Layoffs Increasing in India?

Several technology companies have reduced staff or slowed hiring over the past year.

However, it would be misleading to say that AI alone is responsible for every job cut.

Companies may reduce their workforce because of:

  • Cost cutting
  • Slow business growth
  • Project cancellations
  • Automation
  • AI adoption
  • Changes in client demand
  • Restructuring
  • Skills becoming outdated

In some cases, companies are cutting jobs in one area while hiring in another.

Therefore, the bigger story in 2026 is not simply layoffs. It is a change in the types of workers companies want.

What Did the ICRIER Study Find?

A major study by the Indian Council for Research on International Economic Relations (ICRIER) looked at how generative AI is affecting India’s IT industry.

Researchers surveyed 651 IT companies across 10 Indian cities between November 2025 and January 2026.

Interestingly, the study did not find evidence of huge job losses caused by AI.

Instead, it found a more moderate slowdown in hiring.

Most importantly, the slowdown was concentrated at the entry level.

That makes the situation especially important for students and recent graduates.

Why Are Freshers Being Hit Hardest?

Freshers traditionally enter the IT industry through junior roles.

These may include:

  • Basic coding
  • Software testing
  • Technical support
  • Data processing
  • Junior development
  • Documentation
  • Routine analysis

AI can now help workers complete some of these tasks much faster.

As a result, companies can sometimes complete the same amount of work with smaller teams.

At the same time, employers increasingly want new hires who can work with AI tools rather than compete against them.

Fresher Hiring Is Becoming More Selective

Getting selected is not the only problem.

Some freshers have also faced delays between receiving an offer and actually joining a company.

Recent reporting has highlighted cases where candidates selected by major technology companies were told that joining dates depended on project availability or business requirements.

This shows another change in the industry.

Companies are becoming less willing to hire large numbers of graduates simply to keep them available for future projects.

Instead, hiring is becoming more closely linked to immediate business demand.

Is AI Taking Away IT Jobs?

Yes and no.

AI can reduce the need for some repetitive tasks.

However, it is also creating new jobs.

For example, recent hiring data showed that AI-related recruitment in India’s IT sector increased 16% year-on-year in June 2026, while overall IT hiring declined by 3%.

Across a wider group of industries, AI and machine-learning hiring grew even faster.

Therefore, AI appears to be changing the job market rather than simply eliminating it.

Which Tech Jobs Face More Pressure?

Roles involving highly repetitive work may face greater pressure from automation.

Examples can include:

  • Basic data entry
  • Routine technical support
  • Simple manual testing
  • Basic reporting
  • Repetitive coding tasks
  • Simple content processing

However, that does not mean these jobs will disappear completely.

Instead, one worker using AI tools may be able to complete more work than before.

Which Tech Skills Are Growing?

While traditional entry-level hiring is under pressure, demand remains stronger for specialised skills.

Areas worth watching include:

Artificial Intelligence and Machine Learning

Companies need people who can build, use and manage AI systems.

Therefore, skills related to machine learning, generative AI and AI applications can be useful.

Data Analytics

Businesses still need people who can understand data and turn it into useful information.

Useful skills include:

  • SQL
  • Python
  • Excel
  • Power BI
  • Data visualisation

Cloud Computing

Companies continue to move software and data to cloud platforms.

As a result, skills related to AWS, Microsoft Azure and Google Cloud remain useful.

Cybersecurity

More digital systems also mean more security risks.

Therefore, cybersecurity continues to be an important career area.

Software Development

Software development is not disappearing.

Instead, developers increasingly need to know how to use AI coding tools while still understanding programming fundamentals.

What Should Freshers Do in 2026?

A difficult hiring market does not mean freshers should stop applying.

Instead, the strategy needs to change.

1. Don’t Depend Only on Your Degree

A degree can help you qualify for a job.

However, employers also want proof that you can actually do the work.

Therefore, build practical projects.

For example, a computer science graduate could create:

  • A website
  • A mobile app
  • A data dashboard
  • An AI chatbot
  • An automation tool
  • A GitHub project

These projects can help show your skills during interviews.

2. Learn to Use AI Tools

Trying to avoid AI is unlikely to help.

Instead, learn how to use it effectively.

For example, developers can use AI to:

  • Explain code
  • Find bugs
  • Generate test cases
  • Write documentation
  • Explore solutions

However, you should still understand the output.

Employers are likely to value candidates who can use AI while also checking whether its answers are correct.

3. Strengthen Your Basic Skills

AI tools are useful, but strong basics still matter.

For software roles, focus on:

  • Programming
  • Data structures
  • SQL
  • APIs
  • Git
  • Problem solving

For data roles, focus on:

  • Excel
  • SQL
  • Python
  • Statistics
  • Data visualisation

Strong fundamentals make it easier to learn new tools later.

4. Don’t Apply Only to Big IT Companies

Many graduates focus only on the largest IT services companies.

However, opportunities also exist in:

  • Startups
  • Global Capability Centres (GCCs)
  • SaaS companies
  • Fintech
  • E-commerce
  • Cybersecurity firms
  • Cloud companies
  • Smaller IT firms

Therefore, widening your job search can increase your chances.

5. Consider Internships

An internship can help bridge the gap between college and a full-time job.

More importantly, it gives you real work experience to add to your resume.

Even a short internship can help if you work on real projects.

6. Create a Better Resume

Avoid sending the same resume for every position.

Instead, change it based on the job.

For a data analyst position, highlight SQL, Excel and data projects.

Meanwhile, for a developer role, highlight programming languages, GitHub projects and technical skills.

Keep the resume simple and easy to scan.

7. Build a Strong LinkedIn and GitHub Profile

Recruiters often check candidates online.

Therefore, keep your LinkedIn profile updated.

Developers should also consider maintaining a GitHub profile with real projects.

A working project can sometimes say more about your skills than a long list of certificates.

Should Freshers Be Worried About AI?

Freshers should take the changes seriously, but the data does not support the idea that technology careers are disappearing.

ICRIER’s study found no evidence supporting predictions of massive job losses following AI adoption. In fact, it found that jobs with greater AI exposure, particularly technical and analytical roles, were showing stronger demand.

The challenge is at the entry point.

Companies may hire fewer people simply to perform basic tasks.

Therefore, freshers need to enter the workforce with stronger practical skills than previous batches.

Will IT Hiring Improve?

Nobody can predict hiring levels with certainty.

However, India’s IT industry is still expanding into areas such as AI, cloud services, data, cybersecurity and digital transformation.

At the same time, AI is changing how IT companies price and deliver their services. Reuters reported in August that clients are increasingly demanding higher productivity for lower costs, pushing Indian IT firms toward more AI-driven and outcome-based work.

Therefore, future hiring may look different from the mass recruitment model of previous years.

FAQs

Are tech layoffs happening in India in 2026?

Yes, some technology companies have reduced staff or slowed recruitment. However, restructuring, business conditions, automation and changing client demand can all contribute to job cuts.

Is AI replacing IT jobs in India?

AI is automating some tasks, particularly repetitive work. However, AI-related hiring is also growing, so the overall effect is more complex than simple job replacement.

Why is it difficult for freshers to get IT jobs?

Companies are hiring more selectively, while AI can now assist with some tasks traditionally assigned to junior employees. Project-based hiring and delayed onboarding have also made entry-level recruitment harder.

Which skills should freshers learn in 2026?

AI, Python, SQL, cloud computing, cybersecurity, data analytics and software development are useful areas. However, candidates should choose skills based on the jobs they want.

Is software development still a good career?

Yes. Software jobs continue to exist, but developers increasingly need to work with AI-assisted tools and keep their technical skills updated.

Should freshers learn AI?

Yes. Even if you do not plan to become an AI engineer, knowing how to use AI tools effectively can be useful in many technology roles.

Final Words

The tech layoffs and hiring slowdown in India in 2026 are creating a difficult environment for freshers.

However, the situation is not simply “AI is taking everyone’s jobs.”

Research shows that entry-level recruitment is under greater pressure, while demand for specialised AI and technical skills continues to grow.

For freshers, the message is clear: a degree alone is becoming less powerful.

Practical projects, strong technical basics, AI skills, internships and a wider job search can improve your chances of getting hired.