Andy Mukherjee: How the AI shake-up of India’s tech sector has begun to hit its property market

Subscribe to enjoy similar stories.India’s outsourcing industry, its largest white-collar employer, is a juggernaut that has all but stopped moving. The dollar revenue at the top five software-services exporters has grown slower than 3% for 10 straight quarters—a shadow of the double-digit expansion in the previous two decades. As these companies squeeze hiring to survive the existential challenge posed by artificial intelligence (AI), the aftershocks are starting to upend everything from real-estate demand to mortgage-underwriting norms.

Last week, Infosys forecast a much slower pace of increase in sales than analysts had been expecting. At HCL, revenue for the March quarter declined from the previous three months. After a four-month $115 billion rout, investors are losing faith in a business model centred on the most-populous nation’s army of young engineers, which gave it a wage advantage over developed countries.

Outsourcing generated a million middle-class jobs every year; it also drove ancillary employment in real estate, retail and services.But in the past three years, the top five firms have shed a net 85,000 employees. Last year it was uncertainty about US tariffs that led clients to pause tech upgrades. This year, it’s the war in Iran.

However, the more durable threat is from models like Claude and Mythos. They fix bugs and write code at a fraction of the human cost.Cities like Hyderabad, Pune and Bengaluru, where knowledge workers account for a significant share of homebuyers, are witnessing sluggish sales and rising inventories of unsold apartments. Even global tech heavyweights would rather invest in high-end chips and data centres than programmers.