Job Layoffs: Global and Indian Trends (2025–2026)

 Job Layoffs: Global and Indian Trends (2025–2026)

Abstract

The global labor market entered 2026 amid sustained job layoffs across technology, telecom, manufacturing, and consumer sectors. Beginning in mid-2024 and accelerating through 2025, companies across the United States, Europe, and India initiated workforce reductions driven by economic uncertainty, slowing consumer demand, and a rapid transition to digital and AI-based operating models. The acceleration of automation, cloud computing, and generative AI reshaped talent requirements, leading to restructuring even in high-skill roles across engineering and IT services. This paper analyzes global layoff trends with a focus on multinational corporations and India’s IT sector, including case evidence from Ericsson’s 1,600-job reduction in Sweden and workforce rationalization by Indian firms such as TCS. The study highlights underlying drivers—technological disruption, market stagnation, and strategic refocusing—and assesses labor-market implications, including youth unemployment, skill mismatches, and emerging socioeconomic risks. Finally, the report provides policy and industry recommendations to support workforce transition, reskilling programs, and diversified employment ecosystems that can absorb displaced workers in high-growth sectors such as AI, renewable energy, and healthcare technology.

 

Keywords:
Global layoffs, AI automation, telecom job cuts, TCS layoffs, startup layoffs, 5G slowdown, skill gaps, youth unemployment, reskilling needs, future of work

1. Executive Summary

Global labor markets entered 2026 under continued pressure from layoffs that began accelerating in late 2024 and surged through 2025. Technology, telecom, and a wide sweep of traditional industries have witnessed job reductions driven by three intertwined forces:
(1) slowing global demand, (2) automation and AI adoption, and (3) restructuring for competitiveness.

The United States remained the largest contributor to corporate workforce rationalization, but Europe, South America, Southeast Asia, and India saw a parallel contraction. Job losses in multinational corporations (MNCs), mid-size service industries, and startups reveal not isolated incidents, but a structural realignment of business models and talent needs.

Using the telecom giant Ericsson as a focal case study and examining India’s workforce experiences—especially in IT services and the startup ecosystem—this paper evaluates the drivers, consequences, and evolving policy and market imperatives shaping labor displacement.

Despite the bleak narrative surrounding layoffs, the transition also signals a reallocation of capital towards artificial intelligence, cloud-first IT architectures, programmable networks, and digitally mediated innovation. The shift is disruptive today, but foundational to future organizational capability.

 

2. Global Layoff Patterns (2025–2026)

2.1 Scale and Pace of Workforce Contraction

Global corporate announcements recorded layoffs running into hundreds of thousands of jobs in 2025, with the United States alone registering more than 1.17 million separations—its highest annual layoff level since the COVID-19 pandemic.

Several trends shaped the magnitude:

• Over-expansion during the pandemic boom: Between 2020–22, tech companies over-hired anticipating long-term digital consumption patterns that did not persist.
• Demand normalization and margin pressure: Weak consumer spending, delayed enterprise IT projects, and falling equipment procurement.
• Return-to-office reversals: Hybrid work inefficiencies have been cited as a factor in trimming staff—particularly from distributed teams.
• AI integration: As machine assistants and generative systems proved functional, corporate CFOs began questioning the need for certain operational roles.

By early 2026, the downsizing had evolved from isolated announcements to a multi-quarter directional shift—companies planning for leaner operating systems rather than temporary contraction.

2.2 Sectoral Impact and Divergence

Technology & Software Services

The sector witnessing the deepest cuts experienced three overlapping challenges:

1. Correction after over-hiring
2. Revenue uncertainty in cloud and enterprise deals
3. Replacing humans with automation

Major U.S. and global firms—Amazon, Microsoft, Meta, Alphabet, Intel, Salesforce, Cisco and Accenture—implemented layoffs ranging from a few thousand to tens of thousands in 2025 alone.
AI copilots, code-generation tools, and automated support systems displaced mid-tier roles such as:

• quality analysts
• project support staff
• customer service layers
• junior programming roles

Telecom Communication Equipment

Telecom suffered from prolonged stagnation and weak monetization of 5G. Ericsson’s latest cut of 1,600 roles in Sweden, announced January 2026, is part of a longer industry recalibration. Other telecom players—Nokia, Huawei partners, and service integrators—undertook similar trims.

Manufacturing, Retail, and Consumer Goods

Traditional industries, though less headline-grabbing than Silicon Valley, faced:

• rising input costs
• constrained discretionary spending
• outsourcing of production to automation-enabled facilities

Sectors such as automotive components and fast-fashion retail implemented rotational layoffs, project closures, and hiring freezes.

 

3. Case Study: Ericsson and Telecom Workforce Pressures

3.1 Company Position and Strategic Transition

Ericsson, a dominant force in global telecom infrastructure, is experiencing one of the toughest business environments in decades. The high hopes pinned on 5G deployment—capsule manufacturing, industrial IoT, smart cities—have not translated into broad commercial returns.

To sustain competitiveness, Ericsson restructured operations toward:

• software-defined programmable networks
• API-based monetization for enterprises
• deep integration with cloud hyperscalers

These transitions by design require fewer human resources than traditional hardware deployment.

3.2 Historical Context and Momentum of Layoffs

Ericsson layoffs did not emerge suddenly.

• 2023: 1,400 roles reduced in Sweden
• 2024: Further 1,200 trimmed
• 2026 planned: 1,600 roles more—about 12% of its Swedish workforce

Add global attrition, and the cumulative contraction becomes significant.

Underlying causes:

• delayed carrier spending and frozen 5G rollouts
• competitive pricing pressure from Huawei and ZTE
• shrinking return on R&D dollars
• desire to lean out manufacturing-led cost structures

3.3 Impact Analysis

Workforce and Community

• Engineering-heavy layoffs indicate that even high-skill technical roles are vulnerable during technological transitions.
• Sweden’s union-driven employment environment requires negotiation, reflecting cultural contrasts with U.S.-style sudden layoffs.

Industry-wide Repercussions

• Signals a global telecom reset, not an isolated firm issue.
• Emphasizes how AI-managed network models displace traditional network support talent.
• Projects a future telecom labor structure rooted more in software architecture than physical network building.

 

4. India’s Experience: Layoffs and Labor Dynamics

4.1 Large IT Services: TCS and Beyond

India’s IT services industry acts as the backbone of the global outsourcing economy. Yet it has not been insulated from shocks.

Tata Consultancy Services (TCS), India’s largest IT employer, executed:

• ~12,000 layoffs across 2025
• Net staff reduction of ~30,000 in late 2025, reversing historic multi-decade hiring growth
• Greater trimming at the mid- and senior levels, where reskilling has lagged

Other giants—Infosys, Wipro, Tech Mahindra, HCL—quietly shrank benches through natural attrition, performance filtering, and project offboarding.

4.2 Startups, Funding Winter, and Covert Job Cuts

India’s startup layoffs represent:

• venture funding scarcity
• AI-first pivots that deprioritize human-heavy models
• valuation discipline replacing “grow at all costs” ideology

Silent layoffs became widespread: employees “encouraged to resign,” probation extensions used as exit strategies, or teams dissolved without headline announcements.

Estimated totals suggest 50,000+ technology jobs lost in 2025, not counting indirect impact on contractors and support ecosystems.

4.3 Labour Market Paradoxes

Despite visible distress, India’s macro-employment picture was not uniformly negative.

• Urban unemployment improved modestly (~6.5% mid-2025)
• Non-tech services, logistics, fintech distribution, and healthcare absorbed some displaced talent

However:

• youth unemployment remains chronically high
• regional opportunity unequal
• gig workers lack social safety nets

This suggests that sector churn, not national shrinkage, defines India’s labor transition.

 

5. Structural Causes Underpinning Worldwide Layoffs

5.1 Technological Disruption: AI as a Catalyst

AI has moved from experimental hype to operational adoption.

Key employer motivations:

• accelerated productivity per employee
• ability to automate repeatable functions
• long-term cost efficiency

A 2025 survey cited nearly half of global CEOs identifying AI as the main trigger for workforce realignment.

Roles most impacted:

• routine programming
• process execution
• business analysis
• customer support
• coordination-heavy project management

5.2 Economic Cooling and Post-COVID Rebalancing

Inflationary pressures in the U.S., EU, and parts of Asia raised borrowing costs, slowed consumption, and strained corporate margin forecasts.

Industries that benefited from stay-at-home digital acceleration were caught off guard when travel, retail, and lifestyle spending resumed normal patterns.

5.3 Strategic Corporate Refocusing

Companies are refunneling resources into:

• cloud-native platforms
• generative AI products
• cybersecurity scalability
• services aligned with recurring subscriptions (SaaS)

Conversely, legacy products—hardware, conventional applications, support outsourcing—are viewed as margin-diluting.

 

6. Implications for Economies, Firms, and Workers

6.1 Workforce Anxiety and Reskilling Imperatives

Layoffs have psychologically reshaped the professional landscape:

• Employees increasingly prioritize skill relevance, not job security.
• Continuous learning—AI literacy, cloud fluency, data analytics—is now essential.
• Middle layers of management are at highest risk unless they reinvent roles through strategic, design, and innovation capabilities.

6.2 Economic Aftershocks

Local and national impacts include:

• declining residential rents in tech hubs when populations thin
• reduced discretionary spending
• knock-on effects on banking, retail, hospitality

Younger and early-career workers are most vulnerable, particularly first-generation graduates entering shrinking tech pipelines.

6.3 Labor Strategy Transformation

Firms are experimenting with:

• contractor-heavy models instead of permanent teams
• gig engineering networks for project-based hiring
• fractional leadership
• offshore support pared back to high-skill niche teams

These imperatives fundamentally reshape the psychological contract between employer and employee.

 

7. Conclusions

The 2025–26 wave of layoffs reflects more than short-term market discomfort. It signifies:

• An irreversible restructuring of work, driven by automation and AI
• A rebalancing of sectoral priorities, away from bulk staffing toward knowledge-intensive capability
• A new global talent map, where regions and roles compete not on wage cost alone, but on innovation capacity

In India, layoffs by giants like TCS, attrition-led optimization across IT services, and contraction in startup hiring show that the country’s digital economy is migrating from service processing toward solutions, product engineering, and automation-literate workforces.

The coming decade will belong to markets and workers who recognize that employment security is replaced by skill security.

 

8. Policy and Strategy Recommendations

8.1 Government and Public Institutions

• Expand reskilling platforms in AI, cloud engineering, data systems
• Offer tax-linked incentives for companies retaining and retraining employees
• Strengthen unemployment insurance and job transition support
• Encourage new hiring ecosystems—renewable energy, healthtech, agritech, climate infrastructure

8.2 Corporate Responses

• Demonstrate transparent restructuring narratives
• Support employee redeployment instead of abrupt exits
• Develop internal “career transitions labs”
• Augment middle managers into product drivers, not just workflow coordinators

8.3 Individual Career Strategies

• Build expertise in AI-augmented workflows
• Cultivate cross-domain skills—data + domain + digital
• Treat learning as a periodic priority, not incidental activity

In summary, layoffs—though painful—mark a turning point in global economic evolution. For workers, policymakers, and firms, the only stable path forward is constant capability renewal and adaptive workforce design.

References

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·         Ericsson. (2026). Corporate sustainability and workforce update: FY2026 restructuring statement. Telefonaktiebolaget LM Ericsson.

·         Gartner. (2025). AI adoption and workforce transformation: Global trends and forecasts. Gartner Research.

·         International Labour Organization. (2025). Global employment outlook: Economic uncertainty and job displacement. ILO Publications.

·         McKinsey & Company. (2025). Technology disruption and the future of work: Impacts of AI on global labor markets. McKinsey Global Institute.

·         Ministry of Labour & Employment. (2025). Quarterly employment survey: Indian IT and services workforce trends. Government of India.

·         NASSCOM. (2025). State of the Indian IT sector: Hiring, layoffs, and skilling. National Association of Software and Service Companies.

·         World Economic Forum. (2025). Future of Jobs Report: Workplace automation and reskilling imperatives. WEF