"The Indian IT industry hit $315B in revenue this year, but headcount barely moved. TCS cut 12,000 roles while GCCs added millions. Here's what's actually happening, with the data and the leaders driving it, and what it means if you're building something instead of staffing it. "
And nobody is surprised. AI has been a thing for years now and it's not going to face a setback in the big 2026 of all. So we think this topic deserves a detailed breakdown. What is still working, what is changing and what this could possibly mean for the next generation of IT experts.
For three decades, the model was straightforward. Take a large pool of trained engineers, bill them to Western enterprises at a discount to local labor costs in their countries and scale it as demand grows. And this is exactly how the Indian IT industry became one of the largest hubs of educated and English-speaking IT professionals in the country, with around 6 million people working directly into the sector in 2026, which is an increase of 2.3% over previous year according to Nasscom’s own data. Cheap labour was the holy grail for western companies, the cost difference was too good to deal with time differences and cultural gaps.
Indian IT professionals managed the repetitive and large scale technology work for companies in the US, UK and other countries. This included software maintenance, manual testing, documentation, customer support and back office data processing. But now, coding assistants can take care of many programming tasks that were once handled by junior developers. AI tools can create documents, automate software testing and resolve customer support queries in seconds. In general, AI performs repetitive and clearly defined tasks very well, which are the same kinds of tasks which traditionally formed the foundation of IT outsourcing.
Now this IT hub is shaking and there are visible cracks in its growth. Nasscom'sAnnual Strategic Review 2026 found that the Indian IT industry's total revenue was $315 billion for FY26, an increase of 6.1% year-on-year, with IT services alone contributing around $149 billion of that figure. On the surface, that sounds like healthy growth. But look at the headcount, the real story becomes clear. The sector added only around 135,000 net jobs in FY26, a headcount increase of just 2.3%, even when revenue increased by more than 6%.
Revenue and hiring used to move together in a pre-AI World. But now it has a certain negative correlation where rising revenue and scaling companies doesn’t necessarily result in increased jobs. The best example of this shift inside the Indian IT industry is Tata Consultancy Services. TCS cut more than 12,000 roles which is roughly 2% of its global workforce. The reason that was given was less employment opportunities and lack of evolved skills among the employees, which resulted in its largest layoff since 2015. At the same time, TCS reported AI-related revenue of $1.8 billion on an annualized run rate, and CEO K Krithivasan has said the company is working towards becoming the world's largest AI-led technology services company.
According to SMEFUTURES, Wipro, has planned around $1 billion for AI investment over three years and has already deployed over 200 AI-powered agents across HR, finance and legal functions internally. The Chairman Rishad Premji described generative AI as a genuine turning point for how the company operates. None of this is a side story anymore. It is the Indian IT industry restructuring itself into something new and it's happening faster than most professionals thought or expected.
Images (20).jpg
If you want proof that this isn't just a LinkedIn talking attempt, look at the stock market's reaction to the Indian IT industry through 2026. The Nifty IT index, which tracks India's largest listed technology companies, has fallen roughly by 24 to 29% over the year, losing around ₹19 lakh crore in combined market value according to Nifty Trader. TCS's market capitalization dropped below ₹10 lakh crore for the first time in years. Infosys and Wipro
One thing that makes this situation different from previous challenges in the Indian IT industry is how quickly it is moving. During the dot com crash and the 2008 financial crisis, the impact was realised over a period of time as companies went over their technology budgets. In 2026, the changes are happening much faster. Investors are questioning the value of IT companies almost every week as AI rapidly changes how businesses buy and use technology services.
Look at what happened over the past few weeks. On June 3, 2026, the Nifty IT index fell about 3.5% in a single day, wiping out most of the gains from the previous session. By June 8, it had dropped around 8% over four trading sessions as investors pulled back from AI related technology stocks.
On June 11, the index fell another 1.6%, marking its seventh straight day of losses and leaving it about 24% below its February 2026 peak. By June 19, the Nifty IT index had reached a new 52 week low. This was not a reaction to one company's earnings report. It is an indication of a broader shift in investor confidence as the market reassessed the future of the entire Indian IT industry in an AI-dominated world.
One event clearly shows how quickly global decisions now affect the Indian IT industry. After Accenture warned that enterprise clients were reducing discretionary technology spending, its stock fell nearly 18% in a single trading session in the US. The next morning, the Nifty IT index dropped about 6%, wiping out more than ₹1.35 lakh crore in market value in one day. The reaction was so strong because Accenture works for many of the same global banks, retailers and manufacturers as Indian IT companies. When these clients decide to spend less on traditional IT services or rely more on AI tools, the impact is felt by the Indian IT industry almost immediately rather than months later.
It's important to understand what the people actually running the Indian IT industry are saying in public, because their takes are genuinely diverse, and that tells you something important.
Rajesh Nambiar, president of Nasscom, the industry body representing the Indian IT industry since 1988, has been quite open and honest about the potential challenges for new graduates or young professionals. Speaking to the press earlier this year, he said it’s not going to be easy for young engineers entering the workforce today. Mr. Nambiar's concern is backed by the hiring trends where entry-level tech job openings requiring less than two years of experience have reportedly fallen sharply industry-wide.
Infosys CEO Salil Parekh has a more of an optimistic public position. Even when his competitors are slowing down the hiring, Mr. Parekh confirmed that Infosys added around 13,000 net employees through the first three quarters of the fiscal year and told investors they will continue to add headcount as they go through. Infosys has also suggested that generative AI could displace around 92 million jobs like front-end development and testing globally, while creating roughly 170 million new ones in areas like AI engineering and data annotation which means the job will net out and eventually the market will create more jobs.
TCS, as mentioned earlier, is trying to do both at the same time. It is reducing roles focused on traditional service delivery while also investing heavily in AI infrastructure. The company is building a full stack AI services strategy, where it can provide AI computing power, infrastructure, and operations to the same clients it previously served mainly with engineering teams.
What all three positions have in common is this. Nobody credible is arguing that the Indian IT industry stays exactly the same. The disagreement is only about who wins in this shift and how brutal things will get for people working at-risk roles.
Top-15-IT-Companies-in-India| ByteHint
While traditional outsourcing firms are slowing their hiring, a completely different part of the Indian IT industry is expanding at a pace nobody could have predicted till a few years ago because of Global Capability Centers or GCCs, also known as the offices that multinational companies set up in another country to handle important business and technology work for the entire organization.
According to the Nasscom-Zinnov GCC Landscape Report for FY26, India now hosts 2,117 GCCs spread across 3,728 operating units, employing 2.36 million professionals and generating close to $98.4 billion in annual revenue. That's 32% growth in the number of centers since FY2021 alone. More than 506 Forbes Global 2000 companies now run a GCC out of India, something that didn't exist a decade ago in the Indian IT industry.
What makes GCCs different from traditional outsourcing is the type of work they do. They were originally created to save costs by handling back office operations, but today they play a +much bigger role. Many of them are now central hubs that support important business decisions, technology development and innovation across the company.
Nearly half of the GCCs set up since FY2021 were scaled with AI as a core part of their operations from the beginning instead of adding it later. According to Nasscom, around 75% of India's GCCs could become high value innovation and transformation hubs over the next five years. This means their role is shifting towards more strategic work instead of just providing routine support services.
To really understand what's breaking inside the Indian IT industry, you should look at the pricing model around which every contract is designed and not just the headcount numbers. For decades, IT services were sold on a full-time-equivalent or time-and-material basis. Which means, a client paid for a fixed number of engineers for a fixed number of hours, and revenue of the industry increased as more and more professionals worked on a project.
That structure is now breaking on both sides at once. AI tools let a single engineer handle the work that used to require a team, which means clients need fewer billable hours to get the same output. At the same time, enterprise buyers are actively demanding outcome-based contracts instead of headcount-based ones. This simply means that the clients are incentivising efficiency and quality over manual labour.
And from the company’s perspective, this shift is welcome as now it needs to hire a smaller team and receive the same revenue while upholding efficiency. It cuts costs in salaries and benefits which at the end makes them more profitable. The work is the same. It’s just faster and cheaper. Now the same things that the foreign companies outshored can be done quickly by AI. There is not much incentive left for western companies to deal with time differences and overseas communication.
General software development is one of the areas AI is taking over the fastest in the industry. However, expertise in complex systems, legacy software, and regulated industries remains valuable because these areas still require human judgment and perspective.
GCCs in India are increasingly taking ownership of products instead of just carrying out assigned tasks. For example, Goldman Sachs develops AI platforms and quantitative tools from its Bengaluru center, while Barclays handles its global payments technology from Pune. This is far more strategic than the traditional outsourced work that helped build the Indian IT industry.
As AI becomes a bigger part of enterprise software, demand is growing for roles in AI supervision, data quality, AI compliance, and human AI workflow design. India already has more than 250,000 AI and machine learning professionals, making it one of the world's largest AI talent pools. These are the areas where hiring is growing even when traditional IT roles are declining.
Cybersecurity is one of the strongest hiring areas in the Indian IT industry today. India entered 2026 with around 120,000 unfilled cybersecurity jobs, while hiring in the sector has grown by 22% year over year for two straight years, according to Nasscom and DSCI. The country is expected to add more than 200,000 cybersecurity jobs by the end of 2026, driven by cloud adoption, higher security spending and the expansion of cybersecurity teams within Global Capability Centers (GCCs).
AI is also creating demand for new engineering roles that barely existed in India a decade ago. India's semiconductor mission is expected to generate around 10 lakh jobs by 2026 in areas such as chip design, VLSI, embedded systems and AI hardware integration. These are specialized engineering roles that go beyond traditional IT services and are much harder for AI to take over.
AI is good at a lot of things but it’s currently in no position to eradicate human touch. If you are nervous whether AI will replace programmers, read our blog to understand it better.
It is easy to focus on market data and company results and forget about the people affected by these changes. Many of those losing jobs are experienced professionals in their 40s and 50s who built long careers in the industry, expecting stable employment. Finding a new role is not always easy and now requires learning new skills. To support this transition, many IT companies are investing heavily in AI training and up-skilling programs for their employees.
The Indian IT industry is investing heavily in AI training to help workers adapt. According to Nasscom, more than two million professionals learned AI skills over the past year, including 200,000 to 300,000 who completed advanced AI training. Wipro trained 235,000 employees in AI basics, with 50,000 finishing advanced courses. Nasscom's FutureSkills program aims to train 400,000 workers, while the government backed IndiaAI initiative has already enrolled 860,000 candidates. These efforts show how seriously the industry is preparing for the AI driven shift.
The honest takeaway for anyone currently working inside the Indian IT industry is this. Experience alone is no longer enough. Specific, current and efficient AI fluency is what's separating people who get promoted to higher GCC roles from people who get left behind in the layoff data.
This is not just an Indian problem. The Philippines, another country that built a large part of its economy on outsourcing, is facing similar challenges. Its business process outsourcing (BPO) industry employs nearly 2 million people and generates about $40 billion in annual revenue, making it one of the world's largest outsourcing hubs alongside India.
Industry analysts estimate that 2 to 3 million BPO workers across India and the Philippines could be affected by AI in the next few years, with around 1 million jobs at risk of becoming redundant as generative AI becomes more popular. Companies are also shifting their investments toward AI. For example, Oracle decided to cut around 12,000 jobs in India to invest more in AI infrastructure. This shows that the impact of AI on outsourcing is a global trend and not one limited to the Indian IT industry.
What is interesting is that the Philippines is responding in much the same way as the Indian IT industry. IBPAP President Jack Madrid has said that technology alone is not enough and that the future depends on integrating AI with human expertise instead of humans trying to compete against AI. Like India, the Philippines is also working to become both an outsourcing destination and a hub for Global Capability Centers (GCCs).
Evolving times require constant skill upgrades, what was in demand before is not in demand right now. So check what might work in your favour and make sure you have all hands on deck.
For founders, this shift creates a different opportunity. The same AI tools that are reducing the need for large outsourcing teams are making smaller teams much more productive. Today, a team of five can build what once required twenty people, because AI handles many repetitive tasks and allows developers to focus on work which requires a higher level of energy, analysis and intelligence. This means startups can build and launch products faster with fewer people than ever before. (Read more to learn How to Make Apps with AI)
There is another side to this for founders. The same AI tools that are causing layoffs and reducing the need for large teams are also making it much easier to build software. Today, a founder does not need twenty engineers or six months to launch a working product. With AI, small teams can build, test, and launch ideas much faster. The same changes affecting the Indian IT industry are also creating new opportunities for people building startups.
The honest answer is that the industry is still adapting. Nasscom describes FY26 as a turning point for the Indian IT industry, not the beginning of its decline. It believes that Global Capability Centers (GCCs) and engineering research and development will lead the next phase of growth. The Zinnov and Nasscom GCC report are saying the same thing, the industry is moving beyond traditional delivery-only work to take on more important business and technology responsibilities which demand accountability.
What Akshat's LinkedIn post highlighted is that the Indian IT industry is no longer moving in just one direction. One part of the industry is seeing traditional, headcount based service work decline, while other is growing rapidly through AI, product development and specialised engineering roles (specialisation of labour). Both trends are happening at the same time. For people working in the industry, what matters most is which side of this shift their skills and career are aligned with.
We have built our own shop on exactly this bet. ByteHint exists because we watched the same shift Akshat wrote about and decided the smart move wasn't to out-staff it, it was to out-build it. A small, senior team that uses AI the way it's meant to be used, to move faster with fewer people, not to replace judgment with automation. If there's an idea you've been sitting on, wondering if you need a big team or a big budget to just get started, you probably don't. Come tell us about it, we would genuinely love to hear it.
Not the industry as a whole, but it is changing the business model that helped it grow. The Indian IT industry is still expected to reach $315 billion in revenue in FY26, according to Nasscom. However, hiring has slowed significantly, and demand for traditional delivery roles is falling as AI takes over tasks like documentation, testing, and basic software development.
Global Capability Centers (GCCs) allow multinational companies to build and manage their own technology teams instead of outsourcing the work to IT service providers. India now has 2,117 GCCs that generate about $98.4 billion in revenue. Many companies are using these centers to handle product engineering, AI research, and other strategic technology work in house instead of relying on outsourcing vendors.
Demand is growing for skills in specialized technologies, product engineering, AI, and research and development. At the same time, general software development and other repetitive, high volume IT services are under the most pressure because AI can perform many of these tasks more efficiently.
Yes, and in many cases more than before. The same AI tools changing the Indian IT industry are helping small, experienced teams build products much faster. For early stage founders, this means they can launch high quality products with fewer people, lower costs, and shorter development timelines.
Transform your idea into a production-ready product. We combine strategic thinking, beautiful design, and bulletproof engineering.
Or reach us at:
info@bytehint.comAnd nobody is surprised. AI has been a thing for years now and it's not going to face a setback in the big 2026 of all. So we think this topic deserves a detailed breakdown. What is still working, what is changing and what this could possibly mean for the next generation of IT experts.
For three decades, the model was straightforward. Take a large pool of trained engineers, bill them to Western enterprises at a discount to local labor costs in their countries and scale it as demand grows. And this is exactly how the Indian IT industry became one of the largest hubs of educated and English-speaking IT professionals in the country, with around 6 million people working directly into the sector in 2026, which is an increase of 2.3% over previous year according to Nasscom’s own data. Cheap labour was the holy grail for western companies, the cost difference was too good to deal with time differences and cultural gaps.
Indian IT professionals managed the repetitive and large scale technology work for companies in the US, UK and other countries. This included software maintenance, manual testing, documentation, customer support and back office data processing. But now, coding assistants can take care of many programming tasks that were once handled by junior developers. AI tools can create documents, automate software testing and resolve customer support queries in seconds. In general, AI performs repetitive and clearly defined tasks very well, which are the same kinds of tasks which traditionally formed the foundation of IT outsourcing.
Now this IT hub is shaking and there are visible cracks in its growth. Nasscom'sAnnual Strategic Review 2026 found that the Indian IT industry's total revenue was $315 billion for FY26, an increase of 6.1% year-on-year, with IT services alone contributing around $149 billion of that figure. On the surface, that sounds like healthy growth. But look at the headcount, the real story becomes clear. The sector added only around 135,000 net jobs in FY26, a headcount increase of just 2.3%, even when revenue increased by more than 6%.
Revenue and hiring used to move together in a pre-AI World. But now it has a certain negative correlation where rising revenue and scaling companies doesn’t necessarily result in increased jobs. The best example of this shift inside the Indian IT industry is Tata Consultancy Services. TCS cut more than 12,000 roles which is roughly 2% of its global workforce. The reason that was given was less employment opportunities and lack of evolved skills among the employees, which resulted in its largest layoff since 2015. At the same time, TCS reported AI-related revenue of $1.8 billion on an annualized run rate, and CEO K Krithivasan has said the company is working towards becoming the world's largest AI-led technology services company.
According to SMEFUTURES, Wipro, has planned around $1 billion for AI investment over three years and has already deployed over 200 AI-powered agents across HR, finance and legal functions internally. The Chairman Rishad Premji described generative AI as a genuine turning point for how the company operates. None of this is a side story anymore. It is the Indian IT industry restructuring itself into something new and it's happening faster than most professionals thought or expected.
Images (20).jpg
If you want proof that this isn't just a LinkedIn talking attempt, look at the stock market's reaction to the Indian IT industry through 2026. The Nifty IT index, which tracks India's largest listed technology companies, has fallen roughly by 24 to 29% over the year, losing around ₹19 lakh crore in combined market value according to Nifty Trader. TCS's market capitalization dropped below ₹10 lakh crore for the first time in years. Infosys and Wipro
One thing that makes this situation different from previous challenges in the Indian IT industry is how quickly it is moving. During the dot com crash and the 2008 financial crisis, the impact was realised over a period of time as companies went over their technology budgets. In 2026, the changes are happening much faster. Investors are questioning the value of IT companies almost every week as AI rapidly changes how businesses buy and use technology services.
Look at what happened over the past few weeks. On June 3, 2026, the Nifty IT index fell about 3.5% in a single day, wiping out most of the gains from the previous session. By June 8, it had dropped around 8% over four trading sessions as investors pulled back from AI related technology stocks.
On June 11, the index fell another 1.6%, marking its seventh straight day of losses and leaving it about 24% below its February 2026 peak. By June 19, the Nifty IT index had reached a new 52 week low. This was not a reaction to one company's earnings report. It is an indication of a broader shift in investor confidence as the market reassessed the future of the entire Indian IT industry in an AI-dominated world.
One event clearly shows how quickly global decisions now affect the Indian IT industry. After Accenture warned that enterprise clients were reducing discretionary technology spending, its stock fell nearly 18% in a single trading session in the US. The next morning, the Nifty IT index dropped about 6%, wiping out more than ₹1.35 lakh crore in market value in one day. The reaction was so strong because Accenture works for many of the same global banks, retailers and manufacturers as Indian IT companies. When these clients decide to spend less on traditional IT services or rely more on AI tools, the impact is felt by the Indian IT industry almost immediately rather than months later.
It's important to understand what the people actually running the Indian IT industry are saying in public, because their takes are genuinely diverse, and that tells you something important.
Rajesh Nambiar, president of Nasscom, the industry body representing the Indian IT industry since 1988, has been quite open and honest about the potential challenges for new graduates or young professionals. Speaking to the press earlier this year, he said it’s not going to be easy for young engineers entering the workforce today. Mr. Nambiar's concern is backed by the hiring trends where entry-level tech job openings requiring less than two years of experience have reportedly fallen sharply industry-wide.
Infosys CEO Salil Parekh has a more of an optimistic public position. Even when his competitors are slowing down the hiring, Mr. Parekh confirmed that Infosys added around 13,000 net employees through the first three quarters of the fiscal year and told investors they will continue to add headcount as they go through. Infosys has also suggested that generative AI could displace around 92 million jobs like front-end development and testing globally, while creating roughly 170 million new ones in areas like AI engineering and data annotation which means the job will net out and eventually the market will create more jobs.
TCS, as mentioned earlier, is trying to do both at the same time. It is reducing roles focused on traditional service delivery while also investing heavily in AI infrastructure. The company is building a full stack AI services strategy, where it can provide AI computing power, infrastructure, and operations to the same clients it previously served mainly with engineering teams.
What all three positions have in common is this. Nobody credible is arguing that the Indian IT industry stays exactly the same. The disagreement is only about who wins in this shift and how brutal things will get for people working at-risk roles.
Top-15-IT-Companies-in-India| ByteHint
While traditional outsourcing firms are slowing their hiring, a completely different part of the Indian IT industry is expanding at a pace nobody could have predicted till a few years ago because of Global Capability Centers or GCCs, also known as the offices that multinational companies set up in another country to handle important business and technology work for the entire organization.
According to the Nasscom-Zinnov GCC Landscape Report for FY26, India now hosts 2,117 GCCs spread across 3,728 operating units, employing 2.36 million professionals and generating close to $98.4 billion in annual revenue. That's 32% growth in the number of centers since FY2021 alone. More than 506 Forbes Global 2000 companies now run a GCC out of India, something that didn't exist a decade ago in the Indian IT industry.
What makes GCCs different from traditional outsourcing is the type of work they do. They were originally created to save costs by handling back office operations, but today they play a +much bigger role. Many of them are now central hubs that support important business decisions, technology development and innovation across the company.
Nearly half of the GCCs set up since FY2021 were scaled with AI as a core part of their operations from the beginning instead of adding it later. According to Nasscom, around 75% of India's GCCs could become high value innovation and transformation hubs over the next five years. This means their role is shifting towards more strategic work instead of just providing routine support services.
To really understand what's breaking inside the Indian IT industry, you should look at the pricing model around which every contract is designed and not just the headcount numbers. For decades, IT services were sold on a full-time-equivalent or time-and-material basis. Which means, a client paid for a fixed number of engineers for a fixed number of hours, and revenue of the industry increased as more and more professionals worked on a project.
That structure is now breaking on both sides at once. AI tools let a single engineer handle the work that used to require a team, which means clients need fewer billable hours to get the same output. At the same time, enterprise buyers are actively demanding outcome-based contracts instead of headcount-based ones. This simply means that the clients are incentivising efficiency and quality over manual labour.
And from the company’s perspective, this shift is welcome as now it needs to hire a smaller team and receive the same revenue while upholding efficiency. It cuts costs in salaries and benefits which at the end makes them more profitable. The work is the same. It’s just faster and cheaper. Now the same things that the foreign companies outshored can be done quickly by AI. There is not much incentive left for western companies to deal with time differences and overseas communication.
General software development is one of the areas AI is taking over the fastest in the industry. However, expertise in complex systems, legacy software, and regulated industries remains valuable because these areas still require human judgment and perspective.
GCCs in India are increasingly taking ownership of products instead of just carrying out assigned tasks. For example, Goldman Sachs develops AI platforms and quantitative tools from its Bengaluru center, while Barclays handles its global payments technology from Pune. This is far more strategic than the traditional outsourced work that helped build the Indian IT industry.
As AI becomes a bigger part of enterprise software, demand is growing for roles in AI supervision, data quality, AI compliance, and human AI workflow design. India already has more than 250,000 AI and machine learning professionals, making it one of the world's largest AI talent pools. These are the areas where hiring is growing even when traditional IT roles are declining.
Cybersecurity is one of the strongest hiring areas in the Indian IT industry today. India entered 2026 with around 120,000 unfilled cybersecurity jobs, while hiring in the sector has grown by 22% year over year for two straight years, according to Nasscom and DSCI. The country is expected to add more than 200,000 cybersecurity jobs by the end of 2026, driven by cloud adoption, higher security spending and the expansion of cybersecurity teams within Global Capability Centers (GCCs).
AI is also creating demand for new engineering roles that barely existed in India a decade ago. India's semiconductor mission is expected to generate around 10 lakh jobs by 2026 in areas such as chip design, VLSI, embedded systems and AI hardware integration. These are specialized engineering roles that go beyond traditional IT services and are much harder for AI to take over.
AI is good at a lot of things but it’s currently in no position to eradicate human touch. If you are nervous whether AI will replace programmers, read our blog to understand it better.
It is easy to focus on market data and company results and forget about the people affected by these changes. Many of those losing jobs are experienced professionals in their 40s and 50s who built long careers in the industry, expecting stable employment. Finding a new role is not always easy and now requires learning new skills. To support this transition, many IT companies are investing heavily in AI training and up-skilling programs for their employees.
The Indian IT industry is investing heavily in AI training to help workers adapt. According to Nasscom, more than two million professionals learned AI skills over the past year, including 200,000 to 300,000 who completed advanced AI training. Wipro trained 235,000 employees in AI basics, with 50,000 finishing advanced courses. Nasscom's FutureSkills program aims to train 400,000 workers, while the government backed IndiaAI initiative has already enrolled 860,000 candidates. These efforts show how seriously the industry is preparing for the AI driven shift.
The honest takeaway for anyone currently working inside the Indian IT industry is this. Experience alone is no longer enough. Specific, current and efficient AI fluency is what's separating people who get promoted to higher GCC roles from people who get left behind in the layoff data.
This is not just an Indian problem. The Philippines, another country that built a large part of its economy on outsourcing, is facing similar challenges. Its business process outsourcing (BPO) industry employs nearly 2 million people and generates about $40 billion in annual revenue, making it one of the world's largest outsourcing hubs alongside India.
Industry analysts estimate that 2 to 3 million BPO workers across India and the Philippines could be affected by AI in the next few years, with around 1 million jobs at risk of becoming redundant as generative AI becomes more popular. Companies are also shifting their investments toward AI. For example, Oracle decided to cut around 12,000 jobs in India to invest more in AI infrastructure. This shows that the impact of AI on outsourcing is a global trend and not one limited to the Indian IT industry.
What is interesting is that the Philippines is responding in much the same way as the Indian IT industry. IBPAP President Jack Madrid has said that technology alone is not enough and that the future depends on integrating AI with human expertise instead of humans trying to compete against AI. Like India, the Philippines is also working to become both an outsourcing destination and a hub for Global Capability Centers (GCCs).
Evolving times require constant skill upgrades, what was in demand before is not in demand right now. So check what might work in your favour and make sure you have all hands on deck.
For founders, this shift creates a different opportunity. The same AI tools that are reducing the need for large outsourcing teams are making smaller teams much more productive. Today, a team of five can build what once required twenty people, because AI handles many repetitive tasks and allows developers to focus on work which requires a higher level of energy, analysis and intelligence. This means startups can build and launch products faster with fewer people than ever before. (Read more to learn How to Make Apps with AI)
There is another side to this for founders. The same AI tools that are causing layoffs and reducing the need for large teams are also making it much easier to build software. Today, a founder does not need twenty engineers or six months to launch a working product. With AI, small teams can build, test, and launch ideas much faster. The same changes affecting the Indian IT industry are also creating new opportunities for people building startups.
The honest answer is that the industry is still adapting. Nasscom describes FY26 as a turning point for the Indian IT industry, not the beginning of its decline. It believes that Global Capability Centers (GCCs) and engineering research and development will lead the next phase of growth. The Zinnov and Nasscom GCC report are saying the same thing, the industry is moving beyond traditional delivery-only work to take on more important business and technology responsibilities which demand accountability.
What Akshat's LinkedIn post highlighted is that the Indian IT industry is no longer moving in just one direction. One part of the industry is seeing traditional, headcount based service work decline, while other is growing rapidly through AI, product development and specialised engineering roles (specialisation of labour). Both trends are happening at the same time. For people working in the industry, what matters most is which side of this shift their skills and career are aligned with.
We have built our own shop on exactly this bet. ByteHint exists because we watched the same shift Akshat wrote about and decided the smart move wasn't to out-staff it, it was to out-build it. A small, senior team that uses AI the way it's meant to be used, to move faster with fewer people, not to replace judgment with automation. If there's an idea you've been sitting on, wondering if you need a big team or a big budget to just get started, you probably don't. Come tell us about it, we would genuinely love to hear it.
Not the industry as a whole, but it is changing the business model that helped it grow. The Indian IT industry is still expected to reach $315 billion in revenue in FY26, according to Nasscom. However, hiring has slowed significantly, and demand for traditional delivery roles is falling as AI takes over tasks like documentation, testing, and basic software development.
Global Capability Centers (GCCs) allow multinational companies to build and manage their own technology teams instead of outsourcing the work to IT service providers. India now has 2,117 GCCs that generate about $98.4 billion in revenue. Many companies are using these centers to handle product engineering, AI research, and other strategic technology work in house instead of relying on outsourcing vendors.
Demand is growing for skills in specialized technologies, product engineering, AI, and research and development. At the same time, general software development and other repetitive, high volume IT services are under the most pressure because AI can perform many of these tasks more efficiently.
Yes, and in many cases more than before. The same AI tools changing the Indian IT industry are helping small, experienced teams build products much faster. For early stage founders, this means they can launch high quality products with fewer people, lower costs, and shorter development timelines.
Transform your idea into a production-ready product. We combine strategic thinking, beautiful design, and bulletproof engineering.
Or reach us at:
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Startups & FundingMost founders close the dashboard too soon. This guide walks you through post-launch analytics, the metrics that actually matter, how to read bounce rate, churn, retention and CAC, what the silence after launch is really telling you, and how to tell a bad launch from a bad product.
MVP & AIA cluttered dashboard is a churn risk in disguise. This guide covers everything from UX principles to the right charts, real examples from Stripe and Baremetrics, a developer checklist, and how to test if it's actually working. Build dashboards users come back to.
Startups & FundingLaunch day came and went. The dashboard stayed quiet. Before you panic or pivot, there's data worth reading. This guide breaks down how to diagnose a silent launch, what your metrics are actually saying, which pattern you're stuck in, and what to do next.
