Should students be wary of large education loans as AI reshapes employment?

New Delhi, Aug 4 (NationPress) Sridhar Vembu, Chief Scientist and Co-founder of the software giant Zoho, cautioned students considering substantial education loans to reconsider their choices, as employment opportunities have diminished, especially in the Information Technology (IT) sector due to the rise of artificial intelligence (AI).

Vembu mentioned that his organization has also reduced its recruitment for new positions because of the influence of AI and job automation. Major IT corporations such as Tata Consultancy Services (TCS) and Microsoft are laying off thousands of employees in response to the AI-driven transformation of job markets.

“A recent alarming situation: a student has incurred around Rs 70 lakh ($80K) in debt at 12 percent interest to pursue a master's degree at a small US college. The issue is that the job market in IT is challenging, particularly for international students, and loan repayments are about to start,” Vembu shared on the X social media platform.

“I am uncertain about how we can assist in this scenario as we have not been hiring significantly while adapting to the AI landscape. This cautious approach to recruitment stems from our policy of avoiding layoffs. I implore students and parents to be vigilant about taking on significant debt for degrees, whether overseas or in India,” he continued.

He further emphasized the need to prevent young individuals from being ensnared in debt under the guise of education.

“The most prudent approach is for potential employers to finance training programs and for the industry to adopt alternative credentials rather than insisting on formal degrees. The most worthwhile investment we make as a company is in training and skill enhancement. I hope other companies will follow suit to prevent young people from being burdened by debt,” he added.

In July, TCS announced the layoff of approximately 12,000 employees, representing around 2 percent of its global workforce, predominantly at mid and senior levels. Microsoft has previously laid off 15,000 employees in 2025 while allocating $80 billion towards AI.

Routine back-office roles, software engineering, IT support, and similar positions were primarily affected by these layoffs.

While TCS attributed this to a “skill mismatch” and challenges in deploying certain roles, the timing and magnitude suggest that the broader adoption of AI and automation is driving these layoffs.

India’s IT industry body, Nasscom, has also pointed out that the IT sector is at a critical juncture, necessitating urgent upskilling and cross-skilling in AI-related business competencies.

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