AI Becomes a Crisis: 6 Major Indian IT Firms See a Net Reduction of 24,422 Employees in a Year; Barclays to Cut 5,000 Jobs

India’s top six IT and engineering companies have seen a net reduction of 24,422 employees over the past year. According to the staffing firm Xpheno, the rate at which existing employees are leaving has outpaced new hiring, leading to a significant decline in the total headcount.

This trend has been observed across major Indian IT firms, including TCS, Infosys, HCLTech, Wipro, Tech Mahindra, and LTIMindtree. Over the last year, 92,000 employees left these organizations, while only 68,000 new hires were brought on board—leaving many vacancies unfilled. Consequently, the combined workforce of these companies has shrunk by approximately 3%, falling from 822,144 in October 2025 to 797,722 in October 2026.

Two Primary Reasons for the Decline

Experts and staffing firms point to AI as the primary driver. AI is increasingly taking over traditional IT roles—such as application maintenance, manual testing, and infrastructure support—resulting in a sharp drop in new recruitment for these areas. A second factor is the weak global economic climate, which has prompted companies to trim their workforce by letting go of employees who are not currently assigned to active client projects. While this does not negatively impact company revenue, it effectively reduces operational costs.

Barclays to Cut 5,000 Jobs; Annual Savings Expected to Reach ₹12,323 Crore

Barclays Bank is set to eliminate approximately 5,000 jobs globally as part of an effort to reduce its expenses. Following mixed third-quarter results and a decline in trading revenue, the bank has decided to accelerate the adoption of AI and automation to reduce costs.

The employees set to be laid off are primarily in back-office, support, and middle-management roles. The bank is implementing AI-driven technologies on a large scale to handle routine and data-related tasks more cost-effectively. These job cuts will result in annual savings of 12,323 crore rupees ($1.3 billion) for Barclays.

This AI-driven downsizing will have a direct impact on India, as it serves as the British bank’s second-largest global hub. In fact, because AI is now rapidly handling tasks like writing code and performing basic technical functions, the bank requires fewer developers.