The job market apocalypse is here, and India’s youth will pay the price with their dreams and aspirations, writes Satyen K. Bordoloi
Since independence, the traditional advice to Indian children has been: attend college, work hard, earn good grades, secure a good job, and be set for life. Today, this is proving to be a death trap as AI adoption is causing job losses globally, starting with the US. As of June 2025, the unemployment rate for general US workers has been below that for recent college graduates (aged 22–27), at 5.8%, a first since records began. The first waves of this tsunami have already hit Indian shores.
Economic uncertainty and declining entry-level job opportunities are to blame, yet it is AI adoption in companies that is disproportionately affecting recent graduates. Bloomberg profiled Jacob Ayoub and Tiffany Lee, recent graduates from prestigious colleges who, despite submitting over 100 job applications each, failed to secure their first positions despite possessing perfect credentials. Millions worldwide are facing this exact situation.
US’ Warning Signs India Cannot Ignore
The pyramid-shaped organisational structure is being replaced by a diamond-shaped one, where instead of the entry-level bottom rung, it is the middle management that is expanding. This is being driven chiefly by agentic AI. Take McKinsey, which has employed 12,000 AI agents alongside human consultants. How many jobs those agents have made obsolete is anybody’s guess.
US companies are systematically eliminating the bottom rung of the traditional pyramid structure, creating organisations where AI handles junior tasks while human resources concentrate on middle management and specialised roles. Now, the impact of adopting agentic AI in a country like India, which produces over 1.5 million engineering graduates annually, could be orders of magnitude greater.
Indian Education’s Unemployment Factory
The numbers paint a heartbreaking picture. Of the 1.5 million engineering graduates, only 10% were anticipated to secure employment in 2025, according to a report by TeamLease. This isn’t just a temporary blip but has been occurring even before the invasion of agentic AI and is a symptom of the breakdown in the traditional education-to-employment pipeline that has sustained Indian families, indeed this nation, for decades.
Additionally, the India Skills Report 2025 indicates that only 54.8% of Indian graduates are considered employable. The mismatch between what students learn and what industries demand has never been more pronounced, with AI accelerating this disconnect at an unprecedented rate.
The problem extends beyond technical skills. Fresh graduates arrive at workplaces unprepared for the collaborative, AI-augmented environment that modern companies now operate under. Then there’s a new, social problem where I’ve heard many senior managers complain about entitled interns who refuse to be ‘stressed’ and for whom every harsh word becomes ‘trauma-inducing. This generational disconnect, combined with AI’s ability to handle traditional junior tasks, has led many companies to avoid hiring recent graduates actively.
The AI Tsunami Hitting Indian Companies
Now consider all this alongside the unprecedented enthusiasm with which Indian companies are embracing AI. AI technology spending in India is projected to reach $10.4 billion by 2028, growing at a robust annual rate of 38%. Currently, 40% Indian organisations have already begun implementing agentic AI, with another 50% planning adoption within the next 12 months.
This surge is thanks to enterprise automation, multilingual AI models, and agentic deployments across sectors such as manufacturing, retail, healthcare, and life sciences. The enthusiasm is also because these companies report significant gains in productivity – 80% – and decision-making – 73% – thanks to agentic AI.
These efficiency gains come at a direct cost to entry-level employment opportunities in the country.
This cost is most visible in India’s IT sector, which employs 5.4 million people and contributes nearly 7.5% to India’s GDP. Tata Consultancy Services, the country’s largest private employer, recently announced layoffs of 12,000 employees: roughly 2% of its 613,000-strong workforce, while simultaneously implementing a revised “bench policy” that limits unallocated project time to just 35 days annually.
The Great Indian Layoff Wave
TCS’s decision to cut 12,000 jobs is more than just corporate cost-cutting; it marks the beginning of a sector-wide transformation that experts predict could result in the elimination of 400,000 to 500,000 jobs over the next two to three years. Oracle India has followed suit with layoffs affecting 10% of its workforce, specifically targeting roles in software development, cloud services, and customer support.
The company’s justification points to the underlying dynamic, as they argue that these are not performance-based cuts, but rather “skill mismatches” and strategic repositioning for an AI-first future. The affected roles are primarily middle and senior management positions traditionally filled by experienced professionals. This means that today, even career advancement is no longer a guarantee of job security.
TCS employees describe the new reality as psychologically devastating. The company’s revised bench policy, implemented on June 12, 2025, that caps unallocated time at 35 days per year, also states that beyond these 35 days, an employee faces “career degrowth or termination”. Performance bonuses are now tied to physical office attendance rather than work quality, creating additional pressure on an already stressed workforce.
The Death of Entry-Level Jobs
It is not just in the US that the traditional pyramid model with a large base of junior employees and a narrow top of senior leadership is giving way to a diamond-shaped model characterised by a bulging middle layer of specialised, tech-enabled managers. With AI, numerous research studies and surveys indicate that a diamond-shaped model of employment is emerging in most companies, a trend that is expected to continue growing.
This means that the broad base of entry-level positions that once provided pathways for fresh graduates can no longer be trusted, as organisations concentrate talent in specialised middle-management roles while using AI to handle routine tasks. The result is a job market that demands immediate expertise rather than offering training opportunities for newcomers.
In such a scenario, where the traditional entry point into formal employment disappears, entire generations face the dangers of prolonged unemployment or underemployment, creating a vicious cycle in which a lack of experience prevents employment, which in turn hinders the acquisition of expertise necessary for future opportunities.
The Skill Gap as an Unbridgeable Chasm
India’s education system struggles to adapt to the AI revolution. Despite our reputation as a technology powerhouse, fewer than 25% of the IT workforce possess AI-related skills, such as machine learning, data science, or neural network engineering. The gap is even more pronounced among fresh graduates, where traditional computer science curricula continue to emphasise rote learning, teaching legacy programming languages and theoretical constructs instead of hands-on AI experience, such as working with real-world datasets, deploying models, or understanding ethical AI frameworks. The gap is especially stark in Tier 2 and Tier 3 institutions.
The problem extends beyond technical competencies. Modern workplaces require what experts call “AI literacy”: the ability to work alongside intelligent systems, interpret AI-generated insights, and apply human judgment to automated processes. These skills aren’t being taught in our educational institutions, leaving graduates fundamentally unprepared for the modern workplace.
Companies like TCS are responding by implementing mandatory upskilling programs that require bench employees to dedicate 4-6 hours daily to learning new technologies. However, this places the burden of adaptation on individual workers rather than addressing systemic educational failures. For recent graduates without existing employment, such opportunities remain inaccessible.
The National Education Policy (NEP) 2020 and the Union Budget 2025 have introduced reforms, including a ₹500 crore allocation for a Centre of Excellence in AI for Education; however, these are still in the early stages of implementation.
Now add this to our nation’s challenges
India needs to create approximately 8 million jobs annually through 2030 to accommodate its growing workforce. This, despite India’s overall unemployment rate standing at 5.2% as of July 2025, with youth unemployment (ages 15-29) reaching 14.9% nationally, and urban areas experiencing rates as high as 19%.
The economic implications of these unemployment levels extend beyond individual hardship. When a significant portion of the educated workforce remains unemployed, consumer spending tends to decline. This reduces demand across multiple sectors. This in turn creates a downward spiral where unemployment leads to reduced economic activity, which in turn creates more unemployment.
India, thus, is staring down the barrel of a mass unemployment gun which has already gone off and is being exacerbated by the quick adoption of AI. Hence, for millions of Indian youth, the traditional promise of education leading to employment security is not just unrealistic, but misleading. The career advice that worked for previous generations is a trap for this one.
The coming years will determine whether India can adapt its economic and educational systems quickly enough to prevent a generation of educated youth from being lost. Without dramatic changes in how society prepares young people for an AI-dominated economy, the dreams of millions will be reduced to dust by the very technologies that promised to create prosperity.
The question is no longer whether this transformation will occur, but whether India’s institutions and leaders will act with sufficient urgency to prevent a social and economic disaster of unprecedented scale. The storm clouds are already visible; the question is whether anyone is preparing for the hurricane at our door.
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