This week, Microsoft gave voluntary exit offers to around 60,000 employees, more than a quarter of its global workforce, situated in the US, UK, Canada, and India. The development follows the company’s rapid ramp-up of Artificial Intelligence (AI) investments. The technical distinction between an exit offer, which translates to about a month’s worth of pay for every year spent at Microsoft, and a traditional layoff shouldn’t obscure the implications for Indian IT.AdvertisementInstead of reacting when business realities structurally shift, our IT majors must anticipate the future and overcome internal governance challenges to do so. Counterintuitive as it may seem, Microsoft’s workforce restructuring suggests a proactive attempt to prepare for the future.Microsoft’s exit offers follow earlier buyouts and job cuts in 2026. The broader directional shift is clear in headcount data: It employed 2,21,000 people in 2022 and remained virtually flat at that level till last year. Like many other diversified IT companies, Microsoft hired aggressively in the Covid-era, expanding its workforce by over 50 per cent from 2019 levels, in anticipation of a secular digital economy boom. But many parts of this economy are now singularly focused on developing and deploying AI.AI-centricity is most visible in the infrastructure spending of the world’s biggest firms. Microsoft’s capital expenditure rose from $64.6 billion in FY2025 to $115.9 billion in FY2026, increasing in absolute terms by around 80 per cent, and in relative terms from roughly 23 to 35 per cent of annual revenues. This is a useful measure of investment intensity in the technology, although total capital expenditure also supports conventional infrastructure requirements.AdvertisementAlso Read | The fight against misinformation cannot rely on technology aloneThe trend is not unique to Microsoft: Meta forecast $135-145 billion in capital expenditure for calendar 2026, while Alphabet raised its forecast to $195-205 billion. These figures are not perfectly comparable since companies differ in accounting treatment, but they do illustrate the scale of spending on AI.Microsoft’s investment is part of a global race to build AI capacity, even as businesses face pressure to demonstrate profits that justify the cost. For India, the takeaways extend beyond whether global firms reduce local headcounts. Anecdotal evidence suggests weaker demand for conventional IT, and a shift towards higher-value AI-enabled services. Indian IT companies must introspect to keep up.A big transformation challenge lies at the top, in our boardrooms. Industry insiders would readily agree that independent directors are symbolic, and when they do contribute, they focus on tactical compliance rather than challenging management on strategic calls like business model viability. Added to this is the structural problem that despite the professionalisation of Indian IT majors, founder dependence is common.Government institutions built to capacitate our boards, such as the Indian Institute of Corporate Affairs, provide board training, but such education must go beyond regulatory duties and compliance to build strategic foresight. This means engaging with universities, experts and markets in broader and more structured ways than is the case today.A second deep-rooted challenge is organisational culture. Indian companies, whether IT-led or otherwise, rarely encourage junior employees to challenge leadership on business direction. But innovation requires irreverence; the willingness to question established assumptions, regardless of hierarchy. Gmail, for instance, began as a 26-year old Google engineer’s effort to rethink email at a company best known for search in the early 2000s, despite internal scepticism about whether the idea fitted its business model.Rigid habits of Indian IT’s middle management present another obstacle. Managers whose careers largely centre on fixed roles will resist taking on new types of work. But AI diffusion demands that mid-management retool, reskill, and embody agile transformation which necessarily involves performing new functions. Academic research suggests that middle management can be a company’s engine of adaptation or its biggest brake.Finally, Indian IT is too slow to signal change. Only a few seem to see the writing on the wall and buck the trend. Despite high levels of confidence in Indian IT previously, Zoho’s founder issued public warnings of impending mayhem in the software industry in October, and the company has reportedly frozen salary hikes in 2026 to avoid mass layoffs.But how many companies or their management openly discuss which roles AI might eat up, train employees for alternative roles, or make internal mobility a priority before restructuring becomes unavoidable?you may likeSilence doesn’t protect anyone. It certainly doesn’t enable the clear-headed policy planning necessary to protect a vulnerable IT workforce — or, more worryingly, the seldom-questioned promise of India’s expanding middle-class.Indian startups offer hope, of course, having shown that flatter structures, greater adaptability and risk-taking are possible. Yet even the collective might of India’s hundred-odd unicorns cannot transform an economy dominated by established businesses whose revenues dwarf theirs. Indian IT needs more engaged boards, cultures that welcome dissent, and leadership that communicates change. The “windows” to prepare are closing fast.The writer is a partner at Koan Advisory, New Delhi