In the last year, global tech giants have slashed tens of thousands of jobs. Oracle cut around 30,000 roles to fund AI data centers, Intel let go of roughly 25,000 as it struggled to keep pace in AI chips, and Amazon trimmed about 16,000 positions. Other well-known names, including Meta, Microsoft, Salesforce, Block and Atlassian all followed suit. Many openly acknowledged that AI agents and the push for greater efficiency were behind the wave of layoffs.
But while the West embraces rapid AI-driven job cuts, China is carving out a different path. Recent court rulings in Hangzhou and Beijing have set a clear precedent: companies cannot fire employees simply because AI or robots can do their jobs. This is not a complete ban on layoffs, but it is a strong signal that technological upgrades alone do not justify casting workers aside. For India, which employs millions in its IT sector, has one of the world's youngest workforces, and is pursuing ambitious AI goals, this development raises urgent and uncomfortable questions.
What Exactly Did Chinese Courts Rule?
In April 2026, the Hangzhou Intermediate People's Court ruled in favor of a 35-year-old tech worker whose company replaced his role with AI, offered him a 40 percent pay cut (from 25,000 yuan to 15,000 yuan), and fired him when he refused. The court declared the dismissal illegal and ordered the company to pay 260,000 yuan in compensation. The court's reasoning was clear: adopting AI is a business choice, not an unforeseeable "major change in circumstances" like a natural disaster or sudden policy shift. Judges ruled that firing someone simply because AI was cheaper did not meet the legal standard for contract termination - and that offering a drastically reduced salary was not a reasonable negotiation.
Similarly, in a 2025 case, a Beijing worker whose manual data mapping job was fully automated won his case. The Beijing Arbitration Commission ruled that the company's decision to switch to AI was a normal business choice to stay competitive - not an uncontrollable event. "The employer's termination of the employment contract was essentially shifting the risk of technological iteration to the employee," the commission found, declaring it illegal.
The key legal point is simple yet powerful: companies must negotiate, offer retraining, reassign roles, or provide proper compensation. They cannot shift the entire cost of the AI transition onto employees. As Hangzhou judge Ding Ye explained, while applying AI to improve efficiency and cut costs is a natural choice for market competition, replacing workers with AI without fair negotiation essentially transfers the normal risks of technological evolution onto ordinary employees.
Important distinction: While Beijing and Hangzhou have ruled clearly against AI-driven firings, not all parts of China have followed suit. In March 2026, a Shanghai court upheld an AI-related termination, finding that the dismissal was lawful after the employer proved genuine role redundancy and followed proper procedures. This shows that China's approach is not a blanket ban - it's an insistence that companies do things right.
Why This Matters Deeply for India
India's IT and BPO sectors employ nearly 6 million people directly, with millions more in support industries. Cities like Bengaluru, Hyderabad, Pune and Nashik are filled with families whose dreams rest on stable software jobs, customer support roles, data entry and back-office work. What happens when AI agents start handling coding, testing, support chats and analysis?
The early signs are worrying:
- The top five Indian IT companies - TCS, Infosys, Wipro, HCLTech and Tech Mahindra - collectively shed nearly 7,000 jobs in FY26. TCS alone accounted for a decline of over 23,000 roles during the fiscal year.
- Fresher hiring targets at TCS dropped from 40,000–42,000 in FY25 to 25,000 in FY27 - a reduction of nearly 40 percent. Infosys plans to hire around 20,000 freshers, the same number as in FY26.
- In April 2026, a complaint was filed before the National Human Rights Commission regarding arbitrary AI-led layoffs by Oracle India, which reportedly cut around 12,000 staff in the country as part of a global reduction.
Behind every number is a real person. A TCS employee in his mid-30s told a newspaper: "I have worked at TCS for over nine years. This feels like a betrayal." His wife works at Accenture, and with both incomes uncertain, they are putting off plans to have a child. A former Oracle employee said: "The email came at 6 am. It just said today is your last day. That's it." These are not statistics - they are lives being upended.
The Dangerous Economic Loop - No Jobs, No Money, No Growth
Here is a straightforward truth that often gets overlooked: workers are also consumers.
If lakhs of people lose regular salaries:
- They stop buying new phones, cars, homes, clothes and eating out.
- Local businesses suffer - from neighborhood kirana stores to malls and service sectors.
- Tax collections drop, and government spending power declines.
- The whole economy slows down.
This is the classic "demand problem" with unchecked automation. Factories and AI systems can produce more, but if ordinary people have no money to buy, who will be the customer?
Estimates suggest that roughly 11 to 12 percent of work in India could be automated - which, given the sheer size of India's workforce, translates into millions of jobs at risk.
The IT employees' body NITES has called for immediate policy intervention. "India still lacks strong legal protection for white-collar employees in the private sector. We need clear guidelines on layoffs, mandatory notice periods, fair severance and accountability in cases of mass layoffs," said NITES president Harpreet Singh Saluja.
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Can AI Create More Jobs Than It Destroys?
According to the World Economic Forum's Future of Jobs Report 2025, AI will displace around 92 million jobs globally by 2030 - but will also create approximately 170 million new positions, resulting in a net gain of 78 million jobs. New roles are expected to emerge in AI training, prompt engineering, data labeling, ethics oversight and robot maintenance. India's young, English-speaking population gives us a genuine advantage here.
In fact, industry body Nasscom projects that AI-related revenue for India's services sector alone will reach $10 billion to $12 billion in FY26.
The government has taken some steps:
- The Union Budget 2026 allocated ₹1,000 crore for the IndiaAI Mission, while proposing a high-powered committee to assess AI's impact on jobs and skills.
- Maharashtra approved an AI policy in April 2026, aiming for over ₹10,000 crore in investment and the creation of 1.5 lakh job opportunities.
- Delhi plans to set up two AI Centres of Excellence with training for over 7,000 individuals.
But the transition will not happen automatically. We need massive skilling programs, education reforms that emphasize critical thinking over rote learning, and policies that genuinely encourage companies to retrain existing staff rather than taking the easy path of layoffs.
A note of caution: The WEF's net gain projection may sound reassuring, but that 78 million new figure is global. Whether India captures a fair share of those new jobs - or loses out - depends entirely on the policies we put in place today.
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What India Can Learn from China
Here are five concrete lessons for India drawn from China's recent legal and policy shifts:
1. Update labor laws. Clear guidelines are needed on whether AI replacement counts as grounds for termination. China's courts have ruled it does not - unless proper procedures are followed. India should consider similar clarity.
2. Mandate retraining before layoffs. Make it a legal requirement for companies to invest in employee upskilling before they can claim roles have become "redundant" due to AI.
3. Establish notice periods and fair severance. NITES has specifically called for these protections. They are not radical - they are standard in many economies, including much of Europe.
4. Create an AI transition fund. Funded by technology companies, this could support displaced workers with reskilling and income support during the transition period.
5. Build stronger social safety nets. Expand unemployment support, strengthen gig worker protections and seriously explore pilot programs for Universal Basic Income.
But perhaps the most important lesson is this: Protecting workers is not just about fairness - it is about economics. Workers are consumers. When people lose their incomes, they stop buying. That hurts everyone, including the very companies replacing them with machines.
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The Road Ahead - Opportunity or Crisis?
The choice is ours. AI is not the enemy. It is a powerful tool that can boost productivity, solve complex problems and improve lives. The real question is: Who benefits?
If the gains flow only to a handful of large companies while millions struggle, we risk rising inequality and simmering social tension. If we manage the transition wisely - with thoughtful policies, accessible education and fair treatment for workers - AI can lift the entire nation.
China is racing ahead in AI but refusing to let ordinary workers bear the full pain. India can aim for something even better - balancing our democratic values, entrepreneurial spirit and demographic dividend.
As India pushes forward with its own AI Mission and its ambition of becoming a developed nation by 2047, we must remember: The strongest economies are not those that adopt technology fastest, but those that ensure their people can keep pace with it.
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Let's Talk - What Do You Think?
- Should India introduce laws that protect workers from being fired simply because AI can do their jobs? Drop a comment and share your view.
- Are you an IT professional worried about your job? What is your company doing - or failing to do - about reskilling and support?
- Is China's approach the right model for India, or is there a better path?
The comment section is open. Let's have a real conversation about the future of work in India.
Share This With Your HR and Policy Teams
Tag your CHRO. Share this in your company Slack. Post it on LinkedIn with the caption: "China just made it illegal to fire workers for being replaced by AI. Should India be next?"
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FAQ
Q: Can Indian companies currently fire employees because of AI?
A: Yes. India's labor laws offer minimal protection for white-collar private sector employees. Unlike China's recent rulings, there is no explicit legal barrier to AI-driven termination.
Q: How many IT jobs has India lost to AI in 2026?
A: The top five IT companies shed nearly 7,000 jobs in FY26. Oracle India alone laid off approximately 12,000 staff as part of global cuts.
Q: Is the Indian government doing anything?
A: Yes. Budget 2026 allocated ₹1,000 crore for the IndiaAI Mission and proposed a high-powered committee to assess AI's impact on jobs. Maharashtra has approved an AI policy aiming for 1.5 lakh new jobs.
Q: Can AI create new jobs in India?
A: Yes. The World Economic Forum projects a net gain of 78 million jobs globally by 2030. India's AI-related services revenue is projected to reach $10–12 billion in FY26.
Q: What is the one thing I should do right now?
A: Upskill. Learn to work with AI, not simply against it. Take online courses in prompt engineering, data analysis, and AI ethics. The people who thrive will be those who learn to manage the machines - not those who ignore them.
Sources
- Shanghai Countervailing Ruling (March 2026): L&E Global, "Shanghai Court Upholds Legitimate Termination After AI-Driven Job Change", March 23, 2026
- Oracle Layoffs (30,000 global / 12,000 India): Business Standard, "Why Oracle laid off 30,000 employees despite strong revenue growth", April 1, 2026; NDTV, "Oracle Layoffs Revive A Fear Bengaluru's Flats Knew", April 1, 2026; Moneycontrol, "Budget squeeze hits workforce", April 1, 2026
- World Economic Forum Future of Jobs Report 2025: WEF, "The Future of Jobs Report 2025"; Forbes, "92 Million Jobs Lost to AI: Who's Most at Risk?", June 24, 2025
- IndiaAI Mission Budget 2026: The Economic Times, "AI plan collides with funding reality as budget halves outlay", February 3, 2026; Magzter, "Budget 2026 allocates ₹1,000 crore for IndiaAI Mission", February 1, 2026
- NITES Statement: MIT Sloan India, "Tech Firms Must Reskill Workers Before Layoffs, IT Body Says", April 6, 2026
Disclaimer
This article is for informational purposes only. It does not constitute legal advice or financial advice. Laws regarding employment, AI, and labor protections vary significantly by jurisdiction. While every effort has been made to ensure the accuracy of the information presented, the author and publisher assume no responsibility for errors, omissions, or any consequences arising from the use of this content. Readers should consult qualified legal or financial professionals for advice specific to their situation. The views expressed are solely those of the author.
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