India Remains Optimistic Amid Global Layoff Wave

One would think that an engineer’s brain is persistently occupied with churning out code and cracking logic and decisions. However, a part of it always ruminates on the dreaded possibility of being laid off. Because the fact is, nobody is safe. 

In 2024, we witnessed another brutal spate of layoffs as some of the biggest companies let go of their talent. About 1.5 lakh employees from 545 companies across the globe were sacked in the past year, according to Layoffs.fyi, an independent layoff curation platform. 

The United States was at the forefront of these cutbacks, with a majority of these companies based out of the country. While artificial intelligence has been cited as a factor in some of these reductions, it is important to note that there are multiple other factors, too. 

While this is bad news, there’s, however, a silver lining for India. 

India – The AI Service Capital of the World?

In India, 2024 provided a sense of security after the COVID-induced layoffs the previous year. In June, over 1 lakh unique jobs were added to a jobs portal, and interestingly, multiple companies that had laid off due to AI were re-hiring! 

Moreover, hiring in Indian IT is expected to increase by 8.5% in FY 25, and even the salaries are expected to see an upswing. 

India, already renowned as the IT service capital of the world, is well positioned to become the AI service capital as well, thanks to its vast talent pool, cost efficiency, and rapidly growing AI expertise. Service providers in India can help build efficient AI agents for thousands of companies in a multitude of industries worldwide. 

In his latest blog post, OpenAI CEO Sam Altman reiterated the dominance of AI agents in the near future. “We believe, in 2025, we may see the first AI agents join the workforce and materially change the output of companies,” he said. 

Even Salesforce CEO Marc Benioff has been hyper-optimistic about this. “I’m not just managing human beings, but I am also managing agents,” Benioff said. A few months ago, he said that his vision was to empower one billion agents with Agentforce, the company’s AI-agent development suite, by 2025. 

Rightfully so, Indian developers are already betting big on building AI agents. The market is expected to reach $47.1 billion by 2030, up from $5.1 billion in 2024. 

Unlike in the US, the focus here is not on replacing humans with AI but on upskilling them. Last year alone, Indian IT companies, such as TCS, Infosys, and Wipro, upskilled over 825,000 employees with generative AI skills. 

It remains to be seen how effective many of these upskilling programmes are since some reportedly complete GenAI courses within hours by rapidly clicking the ‘next’ button to the finish line. 

However, NVIDIA launched a more objective and concrete upskilling program in October. The company partnered with Infosys, Tech Mahindra, and Wipro to upskill half a million developers and consultants to design and deploy AI agents with NVIDIA’s AI suite. 

CEO Jensen Huang praised India’s pool of talent, calling it an “amazing natural resource” in IT expertise. “India’s technical talent is unmatched,” he said. 

The resilience against layoffs may also stem from the hesitation in adopting new AI tools. While Indian IT is investing heavily in generative AI projects and engagements, it is not currently enthusiastic about using these tools in the workplace.

Earlier this year, Mrinal Rai, assistant director and principal analyst at ISG, speaking to AIM about tools like Claude and Cursor, said, “Many of these [GenAI] solutions fail to impress clients. Indian IT service providers have long-standing relationships with enterprises and have experience in the specific nuances in a large or medium-sized business requirement.”

Bloodbath in US-Based Companies

According to Layoffs.fyi, the tech industry in the United States experienced a significant workforce reduction in 2024. It revealed that over 100,000 employees were laid off across 364 companies headquartered in the United States. 

Some of the biggest household names led the wave of cutbacks. Google trimmed its workforce by 1,300 employees, while Microsoft made a more substantial cut of over 3,500 positions. Apple parted ways with 700 employees, and cloud-based sales giant Salesforce reduced its team by approximately 1,000. The list goes on. 

It’s important to note that the data from Layoffs.fyi pertains only to layoffs disclosed or uncovered by public sources. The number of layoffs in US-based firms stood at 180,000 in 2023, which was significantly higher than what was reported in 2024. 

Meanwhile, several industry leaders have been openly discussing AI’s potential to replace human workers. Google CEO Sundar Pichai said that approximately 25% of new code at the company was written by AI, followed by Benioff, who revealed that the company had slashed human escalations in its support infrastructure by a whopping 50%. 

“We’re resolving 83% of all of our inquiries robotically. It’s incredible,” he said.

Notably, Swedish payment company Klarna reported massive efficiency gains with AI. The company said it eliminated hundreds of human jobs by integrating AI to handle customer queries. Klarna had reportedly reduced the query resolution time from 11 minutes to 2 minutes. Moreover, the AI integration reduced repeat inquiries by 25%. 

“AI can do all of the jobs that we humans do. It’s just a question of how we apply and use it,” said Sebastian Siemiatkowski, the CEO of Klarna. 

In 2023, IBM said that it expects AI to replace 30% of its workforce, with plans to cut about 8000 jobs with AI. Since then, the company has laid off at least 4,900 employees, with 1,000 of them fired in 2024. The company also said that AI has helped boost efficiency across multiple sectors of the organization. For instance, IBM has automated recruiting processes, cutting employee mobility processing time by 50%, streamlined source-to-pay processes in the supply chain, and reduced invoice costs by up to 50%.