- Oracle India reportedly laid off about 12,000 employees amid a global IT slowdown
- India's IT sector growth has slowed to 5-6% annually from 15% between 2005 and 2020
- Layoffs in IT have begun to impact Bengaluru's housing market, causing shifts in buyer behavior
The layoffs at Oracle have intensified concerns in India's tech hubs, amplifying housing-market stress that had already begun to surface in Bengaluru as IT professionals reassess big-ticket bets.
Roughly 12,000 employees were laid off in Oracle India, with another round expected within weeks. The layoffs reportedly are part of a global reduction of nearly 30,000 roles and come as growth in India's IT services industry slows sharply after two decades of expansion.
The company cited "organisational change" and said the roles have been eliminated with immediate effect. "Today is your last working day," firm reportedly said in a mail sent to the sacked employees at 6 AM EST on Tuesday.
Saurabh Mukherjea of Marcellus Investment Managers in a podcast said the sector is entering a structural slowdown.
Between 2005 and 2020, IT services firms grew revenues and headcount at around 15% annually, but that pace has dropped to about 5 to 6 percent, with hiring tapering off after Covid.
"This is a sector which boomed for 20 years and is now slowing down," Mukherjea said, noting that the deceleration began before AI gained traction.
Artificial intelligence is now compounding the shift. A 2025 report by NITI Aayog estimates that up to 20% of jobs in IT services and call centres could be impacted by automation by 2031.
Bengaluru shows the faultline
The first visible spillover is emerging in Bengaluru's property market.
Tech professionals are beginning to reassess large housing commitments. Some have deferred high-value purchases, while others are opting for lower-cost homes to limit financial exposure, said real estate experts.
The shift follows a period of rapid price growth between 2021 and 2023 and signals a change in buying behaviour rather than a collapse in demand.
The linkage is direct. IT incomes have historically driven housing demand across Bengaluru, Hyderabad, Pune and NCR. A prolonged hiring slowdown or continued layoffs could weaken absorption and add pressure on existing inventory. "The problem in an environment of layoffs is that it has a twin impact on housing. Fired employees struggle to service their payments and other employees feel they may be next. So they pause on their purchase," wrote real estate consultant Vishal Bhargava in a post on X.
Financial markets are already reflecting the transition. The Nifty IT index has declined around 25% in 2026 so far, as investors recalibrate growth expectations.
ICICI Direct in a note said the sector is entering a "deflationary phase" where automation reduces human effort, compressing revenues linked to billable hours. It estimates 2 to 3 percent annual revenue deflation in the near term, with nearly 30% of the industry exposed.
In a downside scenario, up to $80 billion of Indian IT revenue could be at risk.
However, the longer-term outlook remains tied to adaptation. The same report suggests AI-led services could expand the total addressable market by $300 to $400 billion by 2030.
For now, the signals are converging. Layoffs, slower hiring and shifts in consumer behaviour are beginning to align.
Mukherjea notes that IT exports contribute roughly $300 billion in foreign exchange, making the sector central to India's broader economic stability.
As the adjustment unfolds, early indicators from layoffs to housing demand suggest the impact is already moving beyond the tech sector itself.
A viral report by Citrini Research, titled The 2028 Global Intelligence Crisis, outlined a hypothetical worst-case scenario in which rapid advances in AI automation lead to large-scale job losses and financial turmoil by 2028.
It specifically flags Indian IT majors such as TCS, Infosys, and Wipro as being particularly vulnerable, arguing that their traditional business models could be severely disrupted by AI-powered automation.
According to the report, by 2028 India's IT services industry, which had been exporting more than $200 billion annually, could face a dramatic slowdown as global clients increasingly shift to AI coding agents available at significantly lower costs.
"The entire model was built on one value proposition: Indian developers cost a fraction of their American counterparts. But the marginal cost of an AI coding agent had collapsed to, essentially, the cost of electricity," the report stated. It further warned that as services exports weaken, the rupee could depreciate sharply against the dollar within a span of four months.
While the authors stress that this is a stress-test scenario rather than a base-case forecast, the paper sharpened questions already confronting India's tech economy: how quickly IT firms can pivot to higher-value, AI-led services, and whether the broader economy can absorb the shock if that transition falters.
