Software Engineers Are Unemployed in India due to a combination of economic downturns, technological disruptions, and evolving industry demands. This growing unemployment crisis in the Indian software sector has led to concerns among professionals and policymakers alike. India has long been a global hub for software engineering talent, with its expanding tech industry attracting both domestic and international companies. However, the COVID-19 pandemic and subsequent economic shifts have drastically impacted the job market, leading to a concerning rise in software engineering unemployment in India. This article examines the current scenario, explores key contributing factors, and highlights potential steps toward recovery.
The Current State of Software Engineering Unemployment in India
Despite India’s large pool of tech talent, recent reports highlight alarming unemployment rates among software engineers, exacerbated by pandemic-induced economic disruptions and emerging technological transformations. The India Skills Report 2025 reveals that only around 47% of engineering graduates are employable in the tech sector, with many facing a widening skill gap.
Read About: When will Cognizant Form-16 letter available in india [2025-2026]
Adding to this challenge, layoffs have been significant in 2025. Major IT firms like Tata Consultancy Services (TCS) have announced layoffs affecting over 12,000 employees, primarily in middle and senior management, citing limited deployment opportunities and skill mismatches. Startups, after heavy layoffs in previous years, still saw thousands of job losses but have begun cautiously rehiring as economic conditions stabilize.
Software Engineers Are Unemployed in India” at least 3 times naturally throughout the text. You can introduce it in the introduction, a key subheading, and within the conclusion or solution section.
Urban unemployment in India rose to 7.1% in June 2025, with youth unemployment even higher, reflecting the strain on entry-level engineers and new graduates. Overall, the unemployment rate among software professionals is estimated to range between 15% and 30%, a sharp increase from pre-pandemic levels.
Software Engineers Are Unemployed in India: Understanding the Crisis and Exploring Solutions in 2025Factors Contributing to the Unemployment Crisis
Several factors have converged to deepen the challenge of software engineering unemployment in India:
-
Skills Mismatch & Employability Gap: Many engineering curricula remain outdated, emphasizing theory over practical skills. Emerging technologies such as AI, cloud computing, and cybersecurity are often missing from academic programs. This results in only a fraction of graduates being considered “job ready.”
-
Technological Disruption & AI: The rapid adoption of AI and automation is reshaping IT roles. Routine programming and manual tasks are increasingly automated, leading to fewer entry-level openings. Companies seek engineers with expertise in AI, machine learning, and data analytics, increasing demand for specialized skills.
-
Increased Competition: India produces over 1.5 million engineering graduates annually—the largest in the world—but the supply far exceeds the demand for traditional software development roles, intensifying competition.
-
Economic Slowdown & Budget Cuts: Global economic uncertainties have led firms to cut IT budgets and implement hiring freezes or layoffs, particularly in select segments like middle management.
-
Startup Ecosystem Changes: Startups have faced funding crunches, prompting layoffs, although recent months have seen a 67% decline in layoffs and a 35-40% surge in hiring in growth-stage startups.
Unfolding Numbers: Layoffs and Trends in 2025
-
Over 12,000 jobs cut at TCS, India’s largest IT employer, mainly impacting experienced professionals.
-
Indian startups laid off approximately 3,600 employees in early 2025, with marked declines in layoffs compared to previous years alongside cautious rehiring.
-
Urban unemployment rate reached 7.1% in mid-2025, with youth particularly affected.
-
Employability among software engineers remains low, with only about 17% of engineering graduates securing relevant jobs or internships post-graduation.
Also Read: How to Land Your First Software Engineer Job as a Fresher in India (2025)
Pathways Forward: Solutions to Address Software Engineering Unemployment
While challenges are significant, multiple strategies and initiatives aim to mitigate unemployment and empower India’s software engineering workforce:
1. Upskilling and Reskilling Initiatives
Engineers are encouraged to pursue continuous learning, acquiring skills in emerging technologies such as AI, cloud computing, cybersecurity, and data science. Certifications, online courses, and bootcamps can bridge the employability gap and align talent with market needs.
2. Government Programs and Policies
The Indian government’s Skill India Mission and related schemes like IndiaSkills 2025–2026, SOAR (Skilling for AI Readiness), and PMKVY (Pradhan Mantri Kaushal Vikas Yojana) provide training focused on future-ready skills and AI literacy for youth. These initiatives emphasize practical, industry-aligned skills to enhance employability.
3. Industry-Academia Collaboration & Internships
Bridging the divide between education and industry through internships, apprenticeships, and project-based learning equips graduates with hands-on experience. Companies and educational institutions working together can better prepare students for real-world roles.
4. Encouraging Entrepreneurship and Freelancing
With the rise of remote work and gig platforms, freelancing offers alternatives to traditional employment. Moreover, the robust Indian startup ecosystem—with government support via Startup India—offers opportunities to engineer innovative solutions and generate employment.
5. Adapting to Emerging Technology Trends
Professionals who adapt to AI-driven changes and focus on higher-value tasks, such as AI system design or advanced software architecture, can position themselves competitively for future roles.
Addressing Software Engineers are Unemployed in India and Their Impact
Layoffs, notably at major IT service firms and startups, have disproportionately affected mid-level jobs. For example, TCS cut about 2% of its global workforce (~12,000 jobs) citing skill mismatches. Startups like Ola Electric and Gupshup have also implemented layoffs due to automation and financial constraints.
While layoffs present immediate hardships, the industry is adapting. Hiring is showing signs of recovery in several sectors, especially growth-stage startups focusing on SaaS, fintech, and healthtech. The path to recovery involves a combination of talent upgrading and business model innovation.
Conclusion: Building a Resilient Future for Software Engineers in India
The software engineering unemployment crisis in India is a multifaceted issue driven by macroeconomic factors, technological shifts, and education-industry gaps. The pandemic accelerated challenges already present in the ecosystem, but with coordinated efforts on upskilling, government support, and proactive industry participation, the sector can rebound.
Aspiring and current software engineers need to embrace lifelong learning and specialization to remain competitive. Meanwhile, policy makers and educators must align efforts to ensure skill development matches the pace of technological innovation.
Together, these measures can help software engineers in India overcome unemployment challenges and thrive in a dynamic, evolving tech landscape.
Past Data of the Largest Software Engineers Are Unemployed in India or Tech Layoffs after Covid-19
Also Read: Indian Startup Layoff Tracker: 37,260+ Employees Laid Off By 130+ Startups Since 2022
