IT Layoffs at Oracle Trigger Housing Market Stress Across India’s Tech Hubs Amid Structural Slowdown Fears

Roughly 12,000 employees were laid off in Oracle India, with another round expected within weeks. The layoffs are reportedly 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 stated that the roles had been eliminated with immediate effect. “Today is your last working day,” the firm reportedly said in a mail sent to affected employees at 6 AM EST on Tuesday.

Saurabh Mukherjea of Marcellus Investment Managers, speaking 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. That pace has now declined to about 5 to 6 percent, with hiring tapering off after Covid. Mukherjea noted that the deceleration began before artificial intelligence gained traction, stating, “This is a sector which boomed for 20 years and is now slowing down.”

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.

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, according to real estate experts. This 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 remains 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. Real estate consultant Vishal Bhargava wrote in a post on X that layoffs create a twin impact on housing: fired employees struggle to service payments, while others delay purchases due to fear of job loss.

Financial markets are already reflecting this transition. The Nifty IT index has declined around 25% in 2026 so far, as investors recalibrate growth expectations. ICICI Direct stated in a note that the sector is entering a “deflationary phase,” where automation reduces human effort and compresses revenues linked to billable hours. The firm 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.

Despite near-term pressures, 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. Mukherjea noted that IT exports contribute roughly $300 billion in foreign exchange, underscoring the sector’s central role in India’s broader economic stability.

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 identified Indian IT majors such as TCS, Infosys, and Wipro as particularly vulnerable, arguing that their traditional business models could face severe disruption from 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 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 weakening services exports could trigger a sharp depreciation of the rupee against the dollar within a span of four months.

While the authors emphasized that this scenario represents a stress-test rather than a base-case forecast, the findings have intensified scrutiny on how quickly IT firms can pivot to higher-value, AI-led services and whether the broader economy can absorb the shock if the transition falters. As layoffs, slower hiring, and shifts in consumer behaviour converge, early indicators suggest the impact is already extending beyond the technology sector into the wider economy.