Is AI Really the Reason Behind IT Layoffs ?

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The Layoff Wave: Is AI to Blame?

The tech world has been rocked by a wave of layoffs over the past two years. Major players like Tata Consultancy Services (TCS), Google, Amazon, and Meta have trimmed thousands from their workforce. Often, these job cuts are attributed to the rise of Artificial Intelligence (AI) and automation — but is that really the whole story?

What Companies Are Saying

When TCS recently announced the sacking of 12,000 employees (2% of its workforce), it clarified that AI was not the reason. Instead, it blamed a “skill mismatch” — indicating that many employees didn’t align with the new demands of the business.

Still, AI is an easy scapegoat. Companies love to say they’re "automating operations" to become leaner and smarter. It sounds innovative, efficient — and most importantly — investor-friendly.

What’s Really Going On?

Here’s what’s actually causing these layoffs:

• Economic Uncertainty: Startups and giants alike are feeling the heat of slower funding, inflation, and global conflicts. Consumer spending is tighter, and tech is seen as a “luxury” sector in hard times.

• Shift in Priorities: From 2020 to 2022, tech companies overhired, expecting digital growth to keep booming. Now, with markets stabilizing, many are right-sizing.

• Skilling Gap, Not Job Gap: There’s still work to be done, especially in AI, cybersecurity, and cloud. But many existing employees don’t have the updated skills needed in this fast-changing space.

• Decline in Consumer Tech Demand: People are buying fewer gadgets, spending less on subscriptions, and waiting longer to upgrade. As a result, companies are pulling back on R&D and related headcount.

So Where Does AI Fit In?

AI is transforming workflows. Tools like GitHub Copilot, ChatGPT, and low-code platforms help developers, marketers, and analysts become faster. But rather than replacing jobs outright, AI is reshaping them.

The real message from industry bodies like Nasscom is clear:

“Every wave of disruption brings new roles, new value chains, and new opportunities.”

What Can You Do?

• Upskill: Focus on areas like AI tools, data analysis, cloud computing, and cybersecurity.

• Adapt: Be flexible in switching roles, industries, or tools.

• Stay Updated: Read industry reports and follow thought leaders to anticipate trends.

Final Thoughts

Blaming AI for tech layoffs is often a simplified narrative. While automation is real, the true reasons are much broader — from economic stress to shifting business goals.

In the end, AI isn’t just a job killer. It’s a job shaper — and those who adapt will find new doors opening.