Layoffs at Oracle have intensified concerns across India’s major technology hubs, with early signs now emerging in the housing markets of cities like Bengaluru, Hyderabad, Pune and NCR, where IT incomes have historically driven residential demand.
The job cuts, which reportedly affected around 12,000 employees in Oracle India, are part of a broader global workforce reduction plan that could total nearly 30,000 roles. The company cited organisational changes and informed affected employees that their roles had been eliminated with immediate effect, with termination emails reportedly sent early Tuesday morning US time.
The development comes at a time when growth in India’s IT services sector is already slowing after two decades of rapid expansion. Market experts say the combination of layoffs, slower hiring and automation is beginning to change financial behaviour among tech professionals, especially when it comes to large housing purchases.
Saurabh Mukherjea of Marcellus Investment Managers said in a podcast that the IT sector is entering a structural slowdown. Between 2005 and 2020, IT services firms grew revenues and headcount at roughly 15 percent annually, but growth has now slowed to around 5 to 6 percent, with hiring tapering off after the Covid period. He noted that the slowdown began even before artificial intelligence became a major factor.
Artificial intelligence is now accelerating the shift. A 2025 report by NITI Aayog estimated that up to 20 percent of jobs in IT services and call centres could be impacted by automation by 2031, adding further uncertainty to hiring trends.
Bengaluru shows early impact
Real estate experts say the first visible spillover is appearing in Bengaluru’s property market. Some technology professionals are reportedly postponing high-value home purchases, while others are choosing lower-cost housing to reduce financial risk.
This shift follows a sharp rise in housing prices between 2021 and 2023 and indicates a change in buyer behaviour rather than a sudden collapse in demand. However, analysts warn that prolonged hiring slowdowns or continued layoffs could weaken housing absorption and increase pressure on existing inventory.
Real estate consultant Vishal Bhargava noted that layoffs tend to affect housing demand in two ways — employees who lose jobs struggle with loan repayments, while those still employed often delay purchases due to fear of job loss.
Financial markets are already reflecting the transition. The Nifty IT index has fallen around 25 percent so far in 2026 as investors adjust growth expectations for the sector.
According to a note by ICICI Direct, the sector may be entering a deflationary phase where automation reduces human effort and compresses revenues linked to billable hours. The note estimates annual revenue deflation of 2 to 3 percent in the near term, with nearly 30 percent of the industry exposed. In a downside scenario, as much as 80 billion dollars of Indian IT revenue could be at risk.
Long-term outlook tied to AI transition
Despite the near-term concerns, the long-term outlook depends on how quickly companies adapt to AI-led services. Estimates suggest that AI-driven services could expand the total addressable market by 300 to 400 billion dollars by 2030.
India’s IT exports contribute roughly 300 billion dollars in foreign exchange, making the sector critical to the country’s economic stability. Any structural shift in the industry is therefore likely to have wider economic implications beyond the technology sector.
A research paper titled The 2028 Global Intelligence Crisis by Citrini Research outlined a hypothetical worst-case scenario in which rapid AI automation could lead to large-scale job losses and financial instability by 2028. The report argued that Indian IT firms could be vulnerable if global clients increasingly shift to AI coding tools available at significantly lower cost.
However, the authors described the scenario as a stress test rather than a base-case forecast. Even so, the report has intensified debate over how quickly IT firms can transition to higher-value AI services and whether the broader economy can absorb the shock if the transition is slow.
For now, early indicators — layoffs, slower hiring and cautious home buying — suggest that the impact of the IT sector’s slowdown is beginning to move beyond the technology industry into the broader economy.