Workforce shake-up is here to stay. Brace for it

While it was not stated openly, a reason for layoffs is the advent of artificial intelligence. Companies like Microsoft are finding, one, that with the power of AI by their side, they can do more with fewer employees

The immediate impact of AI-related restructuring at the global scale will also be felt by Indian IT companies.

3 min readOct 28, 2026 06:15 AM IST First published on: Oct 28, 2026 at 06:15 AM IST

Microsoft (MS), the technology company synonymous with computers and software, has made a “voluntary exit offer” to as many as 60,000 of its staff. Its Chief People Officer said that it “gives eligible employees who may be considering a future outside the company a new choice to make that transition now with support”. “With support” suggests that those who do not take up the offer may face a future scenario where they may be let go of, but without the monetary compensation that is available now. The move affects 27 per cent of MS’s total workforce spread across the US, Canada, the UK and India. This comes on the back of a “voluntary retirement programme” in July that was offered to more than 8,700 employees. More than 30 per cent of them accepted it even as MS followed it up by firing another 4,800 a few weeks later.

While it was not stated openly, a reason for these layoffs is the advent of artificial intelligence. Companies like MS are finding, one, that with the power of AI by their side, they can do more with fewer employees. And two, that there is a need to free up money so that hundreds of billions of dollars more can be invested into building AI infrastructure. MS is neither the first company nor the only one that is cutting employees in the wake of AI. Reportedly, some of the biggest players across technology and banking — Barclays, HSBC, Oracle, Meta, Amazon, to name a few — have shed significant bits of their workforce in 2026. What’s more, companies are doing it even as their profits continue to grow.

The immediate impact of AI-related restructuring at the global scale will also be felt by Indian IT companies. It is possible that, in the short term, the transition to AI will create some job opportunities, but over the medium term, this industry, which is the largest provider of white-collar jobs in India, will likely face headwinds. The bigger challenge, however, is for Indian policymakers. AI’s much-touted ability to replace humans threatens India at a time when the country is experiencing a bulge in its youth population, while struggling to create good quality jobs, amid growing unrest among the young. These trends should make policymakers rethink their human resource strategies.