New Delhi: Scroll through any feed this week, and you will find two stories that seem to contradict each other. One says companies are cutting jobs because of artificial intelligence. The other says hiring is up and AI roles are exploding. Both are true, and the gap between them is the real story of work in 2026.

The honest summary is that the job market is not shrinking so much as being reshuffled. Money, skills, and legal protections are all moving at once, and who gains or loses depends on where you stand.

Key takeaways

1. AI is creating and cutting jobs at the same time. One brokerage analysis counted about 83,100 AI-related hires in India against roughly 31,900 layoffs and attrition since 2022, a net gain of about 51,000 roles.
2. The pain is concentrated. India’s IT services sector is expected to shed an estimated 25,000 to 35,000 jobs in 2026 as large firms scale back mass entry-level recruitment.
3. Freshers are feeling it first. IT’s share of fresher hiring has fallen to about 24 per cent, while AI-led roles now make up about 4 per cent of all fresher hiring, up from about 1 per cent in 2025.
4. Gig workers now have a legal place. India’s four labour codes, in force since November 21, 2025, define gig and platform workers for the first time and set up a social security fund.
5. Workers are anxious even where hiring is strong. A survey of 1,552 professionals found 66 per cent of AI and machine learning workers expect layoffs or big headcount cuts within three to six months.
6. Companies are shifting budgets. Money is flowing from payroll toward AI tools and infrastructure, a change that shapes who gets hired and who doesn’t.

The paradox: more AI jobs, more worried workers

On paper, the numbers look encouraging. Job postings rose strongly last year, with nearly 2.9 lakh AI-linked roles posted in 2025 and projections of around 3.8 lakh in 2026. Some trackers show white-collar hiring at a three-year high and unemployment near 5 per cent.

And yet nervousness is widespread. The survey of AI and machine learning workers is a good example. It measures what people expect, not what will happen, and it does not prove that AI is directly behind planned cuts. But it shows how fragile confidence feels, even among people whose skills are in demand.

Part of the explanation is that hiring and firing are no longer the same kind of work. Companies are replacing large, template-style recruitment drives with smaller, targeted hiring for specialised skills. A person who fits the new profile finds doors opening. A person who fits the old one finds them narrowing, sometimes without any announcement.

Where the pain is: freshers and IT services

India’s IT services industry built much of its model on hiring huge batches of graduates, training them and deploying them on routine tasks. AI is eating into exactly that kind of work.

Estimates suggest the sector could lose 25,000 to 35,000 jobs this year, and combined cuts across 2025 and 2026 could reach roughly 43,000. At least one company has said the roles it cut were not being replaced by AI, while acknowledging that AI is changing how work gets done. That distinction matters, and it is not always easy to verify from outside.

For fresh graduates, the shift shows up in what entry-level AI jobs actually look like. They are mostly operational: data analysts make up about 24 per cent of entry-level AI hiring, prompt engineers about 12 per cent, AI operations about 10 per cent and AI quality-testing about 5 per cent. These are real jobs, but they are different from the generic software roles that campuses once fed into.

Follow the money: from payroll to platforms

The finance side of this story is less visible but just as important. Investors and executives have openly said that 2026 budgets would start shifting from labour to AI. One widely cited study estimated that around 11.7 per cent of jobs could technically already be automated using AI.

Two cautions apply here.

First, “could be automated” is not “will be.” Technical possibility and business reality differ, and adoption depends on cost, reliability and regulation.

Second, some analysts warn that companies may cite AI as the reason for cuts even when the real driver is cost pressure or weak demand. When a layoff is described as an AI efficiency move, it is worth asking what else was happening to the company’s finances.

For investors, the question is whether spending on AI turns into profit growth fast enough to justify it. For workers, the question is whether the savings are shared through new roles or simply taken as margin.

The big structural change: gig work gets a rulebook

While the AI debate dominates headlines, a quieter change may matter to more people. On November 21, 2025, India brought four labour codes into force, consolidating 29 central laws into a single framework covering wages, social security, industrial relations and workplace safety.

For gig and platform workers, the Social Security Code is the headline. It defines gig work, platform work and aggregators in law for the first time. It lets the government require aggregators to contribute between 1 and 2 per cent of annual turnover, capped at 5 per cent of what they pay to workers, into a dedicated social security fund.

The rules that put this into practice were notified on May 8, 2026. Platforms were required to register on the government portal and upload their existing gig workers within 45 days. By June, roughly 12 lakh gig workers and 20 aggregators had been registered through the e-Shram system.

There are limits. Gig and platform workers sit under a separate fund and stay outside the provident fund, state insurance and gratuity provisions that apply to employees. Eligibility is tied to a minimum number of days of work with an aggregator. And some state-level welfare boards are reported not to be fully operational, so the benefits on paper are not always the benefits in hand.

The same labour codes also raised the threshold at which firms need government approval for layoffs and closures from 100 to 300 workers, a change employers welcome, and unions have criticised.

Skills: what employers say they need

India’s national employability figure rose to about 56 per cent in the latest edition of a widely followed skills report, and the country is estimated to hold roughly 16 per cent of the global AI talent pool. The skills that keep appearing in demand are AI and machine learning, data analytics, cloud computing and cybersecurity, and many employers say they cannot find enough people who have them.

That points to a mismatch more than a shortage of jobs. There are openings, but not always where people are looking and not always for the skills they have.

What it means for different people

If you’re a fresher or early-career worker. A generic application is competing in a shrinking pool. A portfolio, real projects, and demonstrable fluency with AI tools count for more. Data, cybersecurity and cloud roles are consistently in demand.

If you’re mid-career. Hiring is increasingly skills-led and focused on mid-career professionals. Learning to work alongside AI, not against it, is the safer bet, and so is being able to show results.

If you’re a gig or platform worker. Check whether your platform has registered you and whether you meet the days-of-work requirement. Registration is the route to the new benefits.

If you run a business or manage finances. Plan for the compliance side of the labour codes, including gig-worker registration and contributions. When you cut roles, be clear about why, because the AI explanation draws scrutiny.

If you invest. Watch whether AI spending shows up in earnings, and treat claims about AI-driven savings with the same scepticism you would apply to any other cost-cutting story.

What to watch next

1. Fresher hiring figures for the coming quarters, especially IT’s share.
2. IT services results and headcount, which show how quickly the entry-level squeeze is spreading.
3. Gig-worker registrations and whether the benefits actually reach people.
4. Aggregator contribution rates and how platforms handle the cost.
5. Company disclosures on whether layoffs are tied to AI, cost control or weak demand.
6. Upskilling programmes, and whether training keeps pace with the job market.

FAQs

Is AI taking away jobs in India?
In some places, yes, mainly routine and entry-level work in IT services. But AI-related hiring is also growing, and one analysis shows more AI jobs created than lost since 2022.

How many IT jobs could be lost in 2026?
Estimates run between 25,000 and 35,000, though they are estimates and not official figures.

Are freshers affected most?
Often, yes. Large entry-level recruitment drives are being scaled back, and IT’s share of fresher hiring has fallen.

Which skills are most in demand?
AI and machine learning, data analytics, cloud computing and cybersecurity.

What do the new labour codes do for gig workers?
They define gig and platform work in law, create a social security fund funded partly by aggregators, and require registration so workers can access benefits.

Do gig workers get PF and ESI?
No. They are covered under a separate fund, while PF, ESI and gratuity still apply to regular employees.

Are the layoff fears justified?
Surveys show many workers expect cuts, but a survey of expectations is not proof of coming layoffs.

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