Vicky Chindaliya submitted a leave application at the multinational company he worked for to prepare for his upcoming wedding. He got a termination letter in return.
“I was told it was part of global layoffs, but frankly, I wasn’t worried,” said the thirty-something IIT-Bombay alumnus. “I had studied at illustrious institutions and worked at high-profile multinationals, and my work was good. So I thought I would easily get another job.”
He spent several weeks on his wedding and the associated ceremonies, and started looking for jobs four months later. “First, I was told to wait till appraisals were over, since that was when people normally change jobs. But it turned out people weren’t leaving. The post-Covid job boom was over, and jobs simply weren’t available,” he said.
The Faridabad resident’s situation worsened as companies held back on filling vacancies, with tariffs and conflicts dulling the market. Offers flowed in on LinkedIn and in his inbox, but none translated into a confirmation.
More than a year on, Vicky is dejected after multiple false starts, and is now considering alternatives. EMI defaults have meant frozen accounts, and the newlyweds are getting by on his father’s pension. One option he is weighing is a cloud kitchen. “At least people will always need to eat,” he said. “It is not a job AI can take away.”
Blame it on AI, global slowdown, or the several crises hitting the economy at once, all is not well in the job market. Jobs are being slashed by the thousands, with unemployment acute among the under-35 cohort; some estimates put it as high as 40 per cent.
“There is a slowdown of formal, well-paid jobs even as the informal and gig sectors continue to grow,” said Prof Chandrasekhar Sripada of the Indian School of Business, Hyderabad. “The main reasons are rapid automation, slow offtake of manufacturing investment, an inability to rely on migrant labour, and a poor supply of job-ready talent, especially for new sectors like semiconductors.”
Roopank Chaudhary, partner & rewards leader at the professional services provider Aon, said India was going through a jobs reset. “Entry-level jobs are being reshaped by AI, automation and digital workflows. Employers are becoming far more selective. Attrition has cooled meaningfully. India’s employment story is becoming more demanding,” he said.
When the formula fails
For generations, an unwritten social contract set the standard for growing up: study well, clear your exams, get a job—that was the path to well-being. Through independence, socialism, liberalisation and the market economy, that pact largely held, as generation after generation moved up the social ladder on the twin formula of education followed by employment.
Not any longer. For all its vaunted demographic dividend, India’s Gen Z, armed with degrees and certificates, find that the jobs meant to secure their future have morphed or melted away. Recently, thousands of them took to the streets across cities for weeks over the NEET paper leaks, demanding a Union minister’s resignation. Dig deeper, and there is a more fundamental fear—that this generation’s future, despite playing by the rules, may be worse than the one before it.
“Full-time jobs are not providing a pathway to prosperity. That’s the major grievance young people have,” said Rathin Roy, economist and former member of the Prime Minister’s Economic Advisory Council. “This is the new thing Gen Z is facing that previous generations did not.”
Before sunset
IT is a major reason behind this. India’s sunrise sector since the 1990s, the booming industry was adding a lakh new jobs a year by the 2010s. But in the first nine months of the last financial year, the top five Indian IT companies added just 17 people, down from 11,000 the previous year. And this year’s trend is worse, with a 17 per cent drop on last year and a 60 per cent fall from the post-pandemic hiring spree of 2022.
That is a problem for a generation that shaped its education around a lucrative IT career, and perhaps a foreign posting on the coveted H1B visa. But with the advent of AI and deep tech, Indian IT has been caught flat-footed.
Freshers are worst hit. With basic coding and testing now heavily automated, as much as 25 per cent of entry-level jobs have disappeared. Tata Consultancy Services, India’s largest IT services company, alone has cut more than 23,000 jobs in FY26.
Beyond tech
It would be too simplistic to blame it all on AI. One factor is the staffing cycle colliding with real-world strife. After Covid, flush with government dole-outs and a surge in consumption, many companies went on a hiring spree. But global events soon dulled that optimism—wars from Ukraine to Iran and Donald Trump’s tariff offensive upset the applecart, and the Indian economy went into a K-shaped spiral that squeezed the working class’s spending power.
“After the surge in hiring post-pandemic and the slowdown through 2024 and 2025, hiring sentiment has begun to stabilise,” said Chetan Mangalwedhe, founder and CEO of TalentiFi-X, a staffing firm.
Young people entering the workforce have been worst affected. “The bottom rung of the ladder is breaking,” said Jaspreet Bindra, founder of AI & Beyond, a tech-literacy platform. “But most of the layoffs you’re seeing here are not entirely because of AI—many are down to over-hiring, or a changed geopolitical climate. It is often beneficial to pin the blame on AI, because it drives up your stock when you say you’ve let people go for that reason.”
It’s the economy, stupid
“India’s capital markets peaked in September 2024, and for nearly two years, they are trading below that level. When valuations cool off like this, there is genuine pressure on companies to boost their bottom line,” said Balasubramanian Anantha Narayanan, senior vice-president of TeamLease.
Festival and summer sales have been dull for the past few years despite the government cutting repo rates, raising income tax exemption limits and rationalising GST to boost consumption. A series of shocks—tariffs, the wars and high fuel prices—spoiled the party. The monsoon has underdelivered, too, with June the driest in twelve years.
“You cannot pass all of that cost increase on to customers—you have to absorb some while protecting your market share,” said Narayanan. For most corporations, the way out has been layoffs and a freeze on fresh hiring. “The focus now is a lot more on productivity.”
The breaking of the conveyor belt
“We created a conveyor belt for getting a job: finish school, get an engineering degree, then an MBA, become a management trainee, then assistant manager, senior deputy manager, whatever. You hop on and your life is secure,” said Bindra. “That conveyor belt is now breaking, and a new one will need to be built. It isn’t that jobs no longer exist—it’s that they’ve changed. People who can adapt using AI are getting great jobs.”
For fresh entrants, that is a deal they were never taught. Aishwarya Mahajan, a 27-year-old copywriter in Gurugram, studied literature and film studies hoping to become a creative at an ad agency. Entering today’s workplace was an eye-opener. “None of whatever we were taught worked, because brands now want a portfolio with a digital essence,” she said.
She found the demand was for quick, short reels that aid brand recall, rather than the creative work that once made Indian advertising win awards. “When we are writing for algorithms, they lose the human essence,” she said. With companies cutting budgets on the argument that “AI can get it done”, fewer people are hired and the focus has shifted to volume over storytelling. “Today, employers expect one person to do the work of two. The argument is: otherwise AI will do it.”
Silver lining
Experts argue this is not the end, just a bend. “Every major technological shift has transformed jobs, and AI is no different. The focus is moving from repetitive tasks to higher-value work requiring creativity, critical thinking and problem-solving,” said Vimal Dangri, chief human resources officer and general counsel at Mastek, a provider of enterprise AI, digital and cloud services.
“Is there an impact on jobs? Yes. But overall, there is net job creation. Some jobs are becoming redundant while others are being substituted,” said Narayanan.
In sheer numbers, white-collar jobs continue to be available. While everyone looks for a job in IT, sectors like manufacturing, logistics, health care and renewable energy are hiring, and often struggling to find candidates.
“Job creation is happening in different parts of the economy,” said Sonal Arora, country manager at staffing firm GI Group Holding. “There is growing demand in tier-2 and tier-3 cities, too, but many jobseekers remain focused on a narrow set of industries, locations and roles.”
System reboot
While white-collar work increasingly demands complex problem-solving, there is also a surge in blue-collar jobs. “This shift demands a complete rethinking of engineering education,” said Indranil Manna, vice-chancellor of the Birla Institute of Technology, Mesra. “Technical knowledge alone is no longer sufficient. Employers want graduates who can solve complex problems, think critically and work across disciplines, preparing for careers that will evolve over the next two or three decades.”
Institutions, including the government, have a role to play in reworking policy and preparing society for the changes ahead. “The greatest irony in our country is that employers can’t find enough talent, and people can’t find enough jobs,” said Sripada. “Our urban-centric, office-based employment models don’t connect demand with supply. This is truer in tier-3 and tier-4 towns, where talented youth wait outside the labour market. One way to address this is to adopt remote-work models at scale, and take jobs to people instead of people to jobs.”
Skills for the kill
Earlier, hiring decisions were largely based on technical expertise and experience. “Today, employers look beyond what candidates know to how quickly they can learn and adapt,” said Dangri.
It is all about skills now. “The correlation between the nature of your degree, even the school you went to, and the job you end up doing is increasingly weak,” said Narayanan. “Look at Japan and Germany. Students learn practical skills from class seven or eight, interning with companies from twelve or thirteen right through to leaving school, so they are employable straight after, without necessarily needing a college degree. I have seen someone with an ITI certificate who is a better engineer than an engineer.”
As AI displaces white-collar jobs, hands-on work should become more sought-after. But two obstacles stand in the way: wages, and the stigma that places any desk job on a pedestal.
“There is a social stigma against physical or field jobs,” said Narayanan. “A salesperson out in the field might earn Rs 40,000-50,000 a month, but the perception is that someone earning Rs 20,000-25,000 behind a computer has the more aspirational job. It makes no sense—that desk job is actually at higher risk of being replaced by AI. A field job is unlikely to be replaced; at best, it gets augmented.”
Electricians, plumbers and sanitation workers are highly paid in many countries. Many US data centres pay electricians more than the engineers on site. “In western countries, a construction worker and an office employee earn roughly the same, and the former may even have better perks, through union membership, insurance and health cover.”
Best foot forward
“The larger challenge for India is not simply creating more jobs — it’s creating better-quality jobs, encouraging greater private investment, and keeping education, skilling and industry requirements aligned,” said Kartik Narayan, CEO of Apna.co, a recruitment firm specialising in blue- and grey-collar jobs.
The clock is ticking, because this churn has arrived at a moment when India should have been harvesting its demographic dividend to turbocharge its economy. Instead, its economy and job market are in limbo.
India is at the crossroads, and all eyes will be on the steps the government takes that will determine whether its demographic advantage translates into a dividend or a curse. As Dangri said, “The future belongs to those who remain curious, adaptable and committed to lifelong learning.”
—With Kanu Sarda
