While demand for specialized expertise grows amid automation, firms are cutting headcounts via stealth methods, with millions potentially exposed to disruption.

As AI adoption accelerates, the technology industries in China and India are undergoing a significant workforce shift, leading to widespread but often understated job losses.

In China, major technology firms have quietly reduced their headcounts by more than 130,000 roles, while India’s IT services industry is experiencing tens of thousands of largely unpublicized layoffs. Firms including Alibaba, Baidu, ByteDance, Meituan and Tencent and have implemented substantial workforce reductions, with some business units cutting between 30% and 50% of staff.

Rather than announcing layoffs openly, many of them have relied on less visible methods, such as internal transfers, stricter performance evaluations, and stalled career progression to encourage voluntary departures, thereby avoiding regulatory scrutiny and public backlash.

  • Alibaba alone had reduced its workforce by approximately 34% during 2025, shrinking from 194,320 employees to 128,197, a change driven in part by asset divestments and a strategic pivot toward AI-focused operations.
  • Over the same period Baidu also reported a nearly 7% decline in headcount.
  • Broader reporting indicates that similar downsizing trends are emerging across industries including media, entertainment, and advertising as firms pursue productivity gains tied to AI deployment.
  • A Citibank analysis estimates that about 9.6% of China’s total workforce — roughly 70m jobs — faces high exposure to AI-driven disruption, with younger workers particularly vulnerable, as the risk rises to 13.6% among those in their twenties.

In response, Chinese authorities had announced plans in early 2026 to establish a system for monitoring AI’s impact on employment.

Experiencing a comparable transition, India’s technology industry have seen an estimated 10,000 to 15,000 tech workers that have been quietly laid off by May 2026, with projections for the full year ranging from 25,000 to 35,000 job losses.

Unlike earlier rounds of layoffs — when firms such as Tata Consultancy Services and Accenture had publicly announced cuts exceeding 23,000 positions in 2025 — the current phase is characterized by subtle workforce reductions tied to performance management and evolving skill requirements. According to Layoffs.fyi, India ranks second globally in AI-related technology layoffs in 2026, behind only the United States.

However, the employment picture is not uniformly negative. Demand for AI-related expertise is rising sharply, particularly in India, where job postings for AI roles have increased by 16% year-over-year even as overall hiring in the IT sector had declined by 3%, based on data from Naukri.com. Industry body NASSCOM still expects the sector to generate a net addition of 135,000 jobs in the current fiscal year, pushing total employment close to 6m.

Analysts describe the situation less as a contraction and more as a structural recalibration, with firms reshaping workforce composition to align with automation-driven business models rather than reducing employment across the board.