New Delhi: Sridhar Vembu, Chief Scientist and Co-founder of software major Zoho, on Monday warned students opting for huge education loans to think twice, as hiring has declined, particularly in the Information Technology (IT) sector owing to the AI surge.
Vembu said that his company has also cut down on its hiring for new roles due to the impact of artificial intelligence (AI) and job automation, as IT giants like Tata Consultancy Services (TCS) and Microsoft are laying off thousands of employees amid AI transformation of job markets.
“A recent distress call: a student has taken about Rs 70 lakh ($80K) debt at 12 per cent to get a master’s degree in a small college in the US. The problem is that the job scene in IT is bad, especially so for foreign students, and payments on the loan are starting soon,” Vembu wrote on the X social media platform.
“I don’t know what we could do in this situation because we have not been hiring much as we transform ourselves for the AI era. That caution in hiring is also because we have a policy of not resorting to lay-offs. I urge students and parents to be cautious in borrowing heavily to pursue degrees abroad and in India,” Vembu added. He further stated that we should not trap young people in debt in the name of education.
“The only smart course is for prospective employers to fund training programs and for the industry to broadly accept such alternative credentials rather than ask for formal degrees. The best investment we make as a company is in training and skill development. I hope companies do this widely so we don’t strand young people in debt,” he added.
In July, TCS had announced layoffs of around 12,000 employees — about 2 per cent of its global workforce, mostly at mid and senior levels. Microsoft has laid off 15,000 employees in 2025 while investing $80 billion in AI.
Regular back-office tasks, software engineering, IT support, and other such roles were the main targets of layoffs. While TCS cited “skill mismatch” and difficulties in deploying certain roles, the timing and scale indicate that the wider adoption of AI and automation are driving the layoffs. India’s IT industry association Nasscom has also highlighted that IT sector is at an “inflection point,” calling for urgent upskilling, cross-skilling in AI-driven business skills.
