Bengaluru, India’s premier technology hub, is confronting a significant employment crisis as AI-driven automation has resulted in over 50,000 IT layoffs in 2024. This downturn is anticipated to severely impact the city’s housing market, real estate investments, and local businesses, raising concerns about Bengaluru’s economic future.
The layoffs are expected to cause a substantial decline in rental earnings, with projections indicating a potential ₹3,000 crore loss as paying guest (PG) occupancies could decrease by 30%. Real estate values near tech hubs may depreciate by 15-20%. Moreover, AI-driven job cuts are extending beyond the IT sector into finance and operations, potentially reshaping Bengaluru’s economy.
The crisis is not confined to tech professionals; it threatens to disrupt Bengaluru’s housing market, real estate investments, and local businesses, posing a serious challenge to the city’s economic stability.
For real estate investors, especially those near the Outer Ring Road (ORR), a hotspot for tech parks and corporate offices, the situation is even more alarming. Many have invested heavily in properties, expecting long-term rental returns from Bengaluru’s tech-driven economy. However, with the growing wave of layoffs, the demand for affordable housing is likely to plummet, leaving investors with vacant properties and declining asset values.
The widespread adoption of AI and automation is not only affecting the IT sector but also extending into finance and operations, potentially reshaping Bengaluru’s economy.
In summary, Bengaluru’s reliance on the IT sector has made it vulnerable to technological disruptions. The current wave of AI-driven automation and subsequent layoffs are set to challenge the city’s economic resilience, affecting housing, real estate, and various business sectors.
