Something peculiar has been happening. The headlines say layoffs—roughly 64,000 jobs in one year, then another 40,000 over the next two. The spreadsheets, meanwhile, whisper something else: revenue, slowly but surely, still growing. Not a demand problem. A repricing.
Whether your corner of the world is Indian, Austrian, or somewhere in between, the signal is the same. Companies are cutting people while making more money. That isn’t the usual script for a recession. It’s the script for a structural shift—and the Indian tech industry is right in the middle of it.
The bet that built an industry
Back in the 1990s, India made a wager the world couldn’t refuse: millions of English-speaking engineers, software at a fraction of the cost. The industry that grew wasn’t really selling software in the abstract. It was selling people—man-days, heads, bodies. A staffing business with a very fancy tech label. Revenue was tied to how many warm bodies you could deploy. Elegant, until the day the market decided it didn’t want to pay for bodies anymore. It still wants the software. That’s the twist we keep missing.
When the loom ate the weaver
In the 1700s, India was a powerhouse of textiles. Then the British Industrial Revolution dropped in the power loom—and the hand-weavers were devastated. The need for cloth didn’t vanish. It was insatiable. What vanished was the old way of serving it. Disruptions rarely destroy the underlying human need; they destroy the old method. Survival depends on finding the new method before the old one runs out of road.
Same story, different century. The demand for software isn’t going away. The demand for “bodies per project” is. The question isn’t whether there will be work. It’s whether we’re still billing for the right thing.
The teller who refused to disappear
Here’s the one that still gets me. When ATMs arrived in the 1970s, the prediction was obvious: bank tellers would vanish. Poof. Obsolete. So what actually happened? Between 1970 and 2010, the number of tellers in the United States doubled.
Not because the machines failed. Because they worked. ATMs made each branch cheaper to run—fewer tellers per branch—so banks opened more branches. The pie got bigger. And the teller’s job didn’t die; it changed. Less routine cash handling, more relationship, more advice, more selling the stuff that needed a human in the room. The role was redefined, not erased.
That’s the twist worth holding onto. If AI lowers the cost of producing software, the total market for software will likely expand. The challenge isn’t surviving the shrink. It’s capturing the expand. Are you still the person counting cash, or are you the one in the room when the hard decisions get made?
The offshoring déjà vu
In the 1990s, American tech workers were told they were finished. Cheap Indian labour would do the work. The punchline? Cheap Indian tech let American companies build more software. The market expanded. More high-skilled jobs showed up—architects, product managers, people who lived in the “judgment” layer. American developers didn’t vanish; they moved up the stack.
Now Indian tech is on the receiving end of a disruption. The same question applies: can we move from execution to judgment? From selling labour to selling outcomes? The playbook isn’t new. We’ve seen it work from the other side.
The IBM moment
In the early 1990s, IBM was bleeding—about $5 billion a year. The personal computer had turned the mainframe world upside down. The easy story was break up the company. Lou Gerstner said no. He pivoted IBM into services and integrated solutions. One decision, a different chapter.
Indian tech is standing at a similar fork. Defend the old model—billing by bodies—or build a new one: selling accountability, judgment, results. That’s the IBM moment. Not “will the industry die?” but “who will write the next chapter?”
Why this time bites harder
Two things make this wave different. First, AI isn’t just replacing physical or routine work; it’s coming for high-level cognitive work we used to call “safe.” Second, Indian tech firms have spent a thin 2–3% of revenue on R&D, while global peers sit closer to 12–13%. We were built for execution, not invention. Revenue per employee is rising. Total headcount may keep falling. That’s not a blip. That’s the structure shifting under our feet.
Four questions to think clearly
When a business is being disrupted, it helps to ask:
1. Is the underlying human need going away?
If the need is durable—software, solutions, outcomes—you’re looking at a transformation, not an extinction.
2. What was the actual moat?
Was the advantage cost (fragile) or trust and integration (durable)? Cost gets arbitraged. Trust gets renewed.
3. What’s the pace of disruption vs. adaptation?
Transitions usually take longer than the pessimists fear. That’s your window. Use it.
4. What does leadership actually believe?
Watch where capital and hiring go. Actions reveal beliefs more than words.
The end of chapter one
So here’s the verdict. Indian tech isn’t dying. The specific game—man-day billing, revenue tied to headcount—is. The market for software will grow because AI makes production cheaper. The requirement for survival is simple, even if it isn’t easy: stop thinking of yourself as a labour supplier. Start acting as an outcome partner. Sell accountability and judgment, not just engineering hours.
This is likely the end of the first chapter of Indian tech, not the end of the industry. Whether there’s a strong second chapter depends on the choices tech workers and leaders make now. The need for software isn’t going anywhere. The question is who will be in the room when it gets built—and what we’re selling when we show up.
Show up for outcomes. The rest is just billing.