India's job market may be heading towards a challenging phase, especially for those working in the information technology sector. A combination of slowing growth, rising influence of artificial intelligence, and new US immigration policies is sounding alarm bells for India’s workforce. A recent report by Care Ratings paints a bleak picture, projecting India’s IT sector to grow by just 0% to 2% in FY26. This represents a sharp slowdown compared to previous years and is mainly attributed to weakening global demand and cost-cutting strategies by major tech firms.

This sluggish growth is already impacting employment. On July 27, IT giant TCS reportedly laid off around 12,000 employees—almost 2% of its total workforce—citing increased adoption of AI tools as a major reason behind the decision. As more companies automate operations, roles that were once crucial are rapidly becoming redundant.

But this may just be the beginning of a larger storm. OpenAI CEO Sam Altman recently made a stark prediction that artificial intelligence could completely wipe out customer service jobs and potentially eliminate 30% of all low-skill jobs by 2026. While AI has shown promise in sectors like healthcare with better diagnostic tools, Altman warned against complete reliance on machines, highlighting concerns around cybersecurity and data integrity.

Adding to the woes, US President Donald Trump has taken a hardline stance against outsourcing by American tech companies. In a recent Artificial Intelligence Summit, Trump made it clear that US-based companies like Google and Microsoft should neither build factories in China nor hire workers in India. Stressing on an ‘America First’ strategy, Trump’s comments are expected to have serious implications for Indian tech talent.

This is especially concerning as nearly 60% of India’s IT clients are US-based. If American companies follow through on Trump's policy direction, there could be a 20% decline in IT job opportunities in India. That would mean a severe setback not only for new graduates but also experienced professionals in the sector.

All these factors together—the domestic IT slowdown, AI-led job disruptions, and restrictive US hiring policies—form a triple threat to India’s employment landscape. The implications are far-reaching. While low-skill jobs are under siege from AI advancements, high-skill IT roles are also at risk due to geopolitical shifts and evolving corporate strategies.

For India’s youth and working professionals, the message is loud and clear. Survival in the coming job market will demand continuous upskilling. Areas like artificial intelligence, data science, and cybersecurity are becoming essential for future-proof careers. Without upgrading their skills, workers may find it difficult to stay relevant.

At the same time, the government and industry stakeholders must collaborate to create new employment opportunities. Proactive policies, investment in digital infrastructure, and promotion of local innovation ecosystems can play a crucial role in mitigating rising unemployment risks.

The Indian job market stands at a crucial crossroads, and how it navigates the next two years could define the future of an entire generation of its workforce.

Disclaimer:
This article is based on recent reports, expert opinions, and publicly available statements. It aims to provide an overview of emerging employment trends in India’s IT sector and should not be taken as career or investment advice.