A heavy, brooding charcoal-grey cloud hangs over a multi-storey commercial building standing near the service road of the busy Vyttila-Edapalli bypass in Kochi on Tuesday morning.
Down in the basement of the building, Fatima*, a 35-year-old woman, sits on the granite steps at the entrance to what was once her workplace. The glass door remains closed behind her, and Fatima gazes into an uncertain future, her forced smile failing to hide the uneasiness within.
A senior medical coder at Corohealth Infotech Pvt Ltd, a US-based healthcare analytics company, Fatima has worked from 9 am to 6 pm for the last four years. Their routine changed on July 3, 2026 as the company shut down its operations in Kerala, a decision that shocked around 800 employees.
A frustrated Fatima says, “Nowadays, some of us come here in the morning, sign the attendance register arranged by the district labor office, sit here for some time and leave. We are just following the instructions of government officials. We really don’t think the company is going to reverse its decision.”
Protest in front of Corohealth Infotech Pvt Ltd in Kochi after undeclared retrenchment of employees. | Photo Courtesy: H. Vibhu
“It all seems like a nightmare now,” she says, recalling the horror of the “layoffs” on July 3, 2026.
She recalls, “None of us could believe what the HR (human resources) representatives said. Some of us felt suffocated and we walked out of the office for fresh air. By the time we tried to re-enter, our access was blocked.”
The company laid off employees at its Kochi and Kozhikode offices citing operating losses, raising many uncomfortable questions on the job market, labor laws and alleged threats from artificial intelligence (AI).
In its ‘separation and full and final settlement letter’ sent to the affected employees, Corohealth says it was conducting a workforce restructuring exercise “due to the continued decline in the Company’s Hierarchical Position Category (HCC) vertical.” In medical coding language, HCC refers to the grouping of similar diagnoses into a related category used in risk-adjusted payment models.
The company terminated the services of the employees and paid them compensation in the form of two and a half months’ salary.
This retrenchment has turned into a major controversy and both the Kerala government and opposition political parties have termed it illegal.
similar crisis
Just a week after the Corohealth incident, a similar crisis unfolded in another Kochi-based enterprise, Talrop Pvt Ltd, whose employees came out against the sudden closure of their “₹250 crore ecosystem company”. The closure of 21 start-ups operating under Talrop’s ecosystem has left more than 300 employees unemployed.
The company announced its closure claiming that it was “not built for the AI era”, raising further questions about the impact of cutting-edge technology on various sectors, especially the information technology (IT) industry. The strike led to protests by employees alleging excessive delays in payments. Some investors have also accused the company of fraud. Employees have filed complaints at labor offices in Ernakulam, Thiruvananthapuram and Kannur against various tallrope companies over non-payment of salaries.
The back-to-back layoffs come amid a similar global trend in the IT sector, with Microsoft cutting about 4,800 jobs in the latest example. It is estimated that global business leaders from various sectors have announced to cut at least one lakh jobs linked to AI advancements by October 2025. Reasons cited by companies for the cuts include AI overhaul, streamlining AI-driven operations, and AI expansion steps, all meaning essentially the same thing.
Although the circumstances that led to the termination of CoroHealth and Talrop employees appear to be different, the plight of their employees seems very similar and troubling.
“I lost my job as soon as the home loan was approved. We had decided to settle in Kochi and were about to start building a house as my husband also worked in the city. After the company announced its closure, we canceled the home loan application. Currently, my priority is to find another job in the city and that doesn’t seem easy,” said Srilakshmi K, another employee at Corohealth. She says.
Meanwhile, Fatima is disappointed that she will not be able to meet the family’s expenses, especially her children’s expenses at the moment. There is also a loan to repay.
‘Not many opportunities’
“People like us are no longer able to relocate. Although the juniors among us are willing to relocate to other cities, there are not too many opportunities in this sector. Even when there are vacancies, companies are still offering salaries that are much lower than what we get,” laments Srilakshmi.
Both of them refuse to believe that AI has taken away their jobs. Talrop employees do the same.
“The management started promoting the AI narrative about a week ago, even though we had been facing salary payment issues for several months,” says a Talrop employee. They allege that they have not been paid for the last 11 months.
Jones Joseph, CEO of Talrop, rejects the allegations against the venture. “With advances in AI, developing an educational platform no longer requires three engineers. Instead, it can be done in just three hours,” argues Joseph, before blaming the Middle East war for exacerbating its crisis with disruption in money flows. He says that the pending dues will be paid by October, 2026.
Meanwhile, a section of employees believe that the Corohealth crisis was the culmination of a long-standing unrest between the management and employees.
“Employees in Kochi and Kozhikode had several times raised issues such as long working hours and lack of cab services for those who had to stay back after normal hours. The reasonable demands of the employees must have infuriated the management, especially since such issues were raised only from Kerala,” says a senior company employee, who was instrumental in garnering political and trade union support for the retrenched workers. The company has not yet issued any official response to the development and allegations.
Impact of labor codes
Along with concerns over AI impacting jobs, the Kerala cases have also sparked debate on the impact of new labor codes passed by the Centre, although they have not yet been implemented in Kerala.
Kerala Labor Minister Bindu Krishna says the management of Corohealth has violated the Industrial Relations Code, 2020, as it did not give prior notice to the government before deciding to shut down operations and hence may face legal action. The Code mandates companies with 300 or more employees to obtain government permission at least 90 days before closing an establishment.
He has sought intervention from the Union Labor Minister to resolve the crisis.
Need for unionization?
Trade unions believe that there is a need to unite the workforce in Kerala’s IT sector due to the current crisis.
National President of Center of Indian Trade Unions (CITU) Sudeep Dutta has termed the dismissal of the employees as illegal. He is also skeptical about the actual impact of AI on the job market.
He argues, “There is no concrete evidence that AI is replacing jobs. Large companies are willing to invest more in the AI speculative market than in the production of services and goods in the hope of higher returns. However, this has not yet shown any concrete results.”
“With the latest incidents of layoffs, Kerala IT employees will now feel the need for unionization in the sector,” he says.
Suraj Ndiyanga, state secretary of Karnataka State IT/ITES Employees Association, agrees with Dutta’s views. “The IT industry is witnessing trends such as juniorisation, laying off mid-level and senior employees and hiring low-paid juniors, as well as AI washing-up in the name of technology. The need of the hour is to mobilize the workforce in the IT ecosystem to legally fight such acts.”
Anish Panthalani, president of Progressive Techies, a socio-cultural organization of IT employees in Kerala, believes the sector faces both advantages and disadvantages of the absence of the traditional type of unionism. He says, “It may not always be practical to deal with multinationals on strict union terms on matters such as working hours. At the same time, unions may be able to address many employee-related issues more effectively.”
Panthalani believes that the recent layoffs have created panic among a section of IT employees. He says the community is aware that routine IT jobs are being replaced by AI and some companies have already started upskilling measures, and urges other companies to follow suit. Describing several instances of layoffs, including the latest one, as unethical, he emphasized that progressive techies oppose such moves.
All India Professionals Congress state president Ranjit Balan also questions the “insensitive” manner of layoffs in both the companies. They suggest, “Job loss due to mismatch with AI skill sets appears inevitable. However, such scenarios must be handled sensitively. Governments, institutions and professionals must together address the skill gap in the workforce, besides ensuring better compensation, including extension of health insurance in case of job attrition.”
gtech offer
Meanwhile, the Group of Technology Companies of Kerala (GTECH), comprising about 300 member companies, signaled an unusual goodwill gesture towards the affected employees. In a meeting with Kerala Industries and IT Minister PK Kunhalikutty, GTECH leaders said they will facilitate the redeployment of CoroHealth employees by collecting their biodata and creating a platform through which member companies can identify suitable candidates based on their current vacancies.
Meanwhile, ecosystem facilitators are treading a cautious path when it comes to the AI question. Emerging automation trends and the resulting impact on the sector and the job economy have led IT parks to rethink their approach.
“There is a risk appetite and it will take a few years to be clear where the sector is headed. We expect companies to be smaller in size in the future while their number is likely to grow,” says Susantha Kurunthil, CEO of Infoparks.
The Kerala government, on its part, has initiated conciliation talks with the management of both Corohealth and Talrop.
The state labor department is in the process of examining the documents and obtaining relevant details in the case of both the companies. “Our priority is to explore all options to keep the company in the state and protect the employees,” says a department official.
The government has scheduled another meeting with company representatives and other stakeholders on July 20, 2026, while another round of talks with Talrop leadership is scheduled before July 25.
Fathima, Srilakshmi and their former colleagues, as well as the state’s IT sector, are eagerly awaiting the outcome of the meeting to restart their careers and lives.
(*Name has been changed to protect her privacy.)
