Bengaluru’s tech boom fading?: AI-driven layoffs threaten jobs and local economy
Bengaluru, India’s celebrated tech capital, is now on the edge of a what seems like a severe employment crisis, fuelled by widespread layoffs in the Information Technology (IT) sector and the accelerating adoption of artificial intelligence (AI) and automation.
The report added that in the coming weeks and months, Bengaluru is expected to witness widespread layoffs in the IT industry, with lower-wage employees being the most vulnerable.
According to a report by Inshorts, the city now confronts a ripple effect that could destabilise its housing market, real estate investments, and local economy, reported the Financial Express, today, Tuesday, March 18.
Layoffs targeting vulnerable workers
The report warns of an imminent wave of job cuts in the coming weeks and months, with lower-wage Information Technology (IT) employees, such as entry-level programmers and software testers, bearing the brunt.
These workers, who often rely on the city’s most affordable housing options, are increasingly expendable as companies turn to cost-cutting measures and AI-driven systems.
Capable of coding, debugging, and optimising software with superior efficiency and minimal expense, AI is rapidly displacing human labour in these roles.
Housing market will take the strain
The fallout from these layoffs is already hitting Bengaluru’s housing sector. Paying Guest (PG) facilities, a lifeline for junior Information Technology (IT) staff, are bracing for a steep drop in demand, putting landlords and operators under financial pressure.
The rental market, too, faces a downturn as occupancy rates decline. Property owners who banked on a steady stream of tech tenants, particularly around tech hubs like the Outer Ring Road (ORR), may soon grapple with vacant units and shrinking property values.
AI's unseen threat
A key factor fueling this crisis is AI’s evolution. Many in the industry fail to see automation as an immediate danger, yet AI tools are already transforming the tech landscape by executing tasks like coding and software testing with precision and speed unmatched by humans.
Beyond the IT sector, the crisis poses a broader challenge to Bengaluru’s economic stability. With affordable housing demand poised to plummet and real estate values at risk, local businesses that thrive on the spending power of tech professionals could also take a hit, according to the reports.
