Innodata shares plunge 25% on Nasdaq after report of over 500 India layoffs

Innodata shares plunged after India Today reported nearly 550 layoffs in India, alongside cuts in the Philippines. The reported assignment ramp-down has sharpened scrutiny of customer concentration and the company's revenue outlook.The stock fell as much as 28% during the trading session. New Delhi,Oct 28, 2026 08:02 ISTInnodata shares plunged 25.32% on Nasdaq on Tuesday after IndiaToday.in reported that the artificial intelligence services company had laid off nearly 550 employees in India, with job cuts also reported in the Philippines.The stock fell as much as 28% during the trading session, raising questions about a business assignment being scaled down and the potential implications for the company's business.Innodata, which trades on Nasdaq under the ticker INOD, closed at $44.74 on October 27, down $15.17 from the previous close of $59.91. Trading volume surged to nearly 9.8 million shares, compared with around 741,000 shares in the previous session.IndiaToday.in was the first to report on Tuesday that nearly 550 employees in India were affected by the layoffs on October 26. Employees described losing access to company laptops and official IDs during the workday before receiving termination emails on their personal accounts. Job cuts were also reported among the company's teams in the Philippines.WHY DID INNODATA SHARES FALL?The sharp decline came as the layoffs drew attention to a possible reduction in work from a major business assignment. A termination email reviewed by India Today said the company had decided to discontinue an employee's employment because of a “ramp-down of the business assignment” for which the employee had been engaged. The email also stated that the decision was based on business and operational requirements and was not related to the employee's individual performance.While the communication points to a reduction in the assignment, it does not identify the client involved or quantify the financial impact. Innodata has not publicly confirmed that the layoffs were linked to the loss of a customer or disclosed how the reported cuts would affect its revenue.The share-price decline followed the layoffs report, but the timing alone does not establish that the report or the job cuts caused the fall. The company's business outlook, customer relationships and any fresh disclosures will be important in assessing the market reaction.CUSTOMER CONCENTRATION ADDS TO INVESTOR CONCERNSInnodata provides data engineering and artificial intelligence services, including data labelling, model training and evaluation, to technology companies and other businesses developing AI systems.Its dependence on large customers is an important factor in assessing the potential impact of a reduction in client work. In its 2025 annual report, Innodata said one customer in its Digital Data Solutions segment accounted for approximately 58% of its total revenue in 2025, compared with 48% in 2024. The company did not identify the customer in the filing.The disclosure highlights the importance of major customer relationships to Innodata's revenue. However, there is no confirmed information establishing that the customer accounting for this share of revenue is the one linked to the reported layoffs.The termination email reviewed by India Today does not name the client or provide details of the assignment that was scaled down. The company had not publicly clarified the layoffs or their financial implications at the time of writing.Investors will be watching for further details from Innodata on the affected business assignment, the scale of the workforce reductions and any implications for its revenue outlook.The key question is whether the ramp-down reflects a change in the volume of work under an existing engagement or a more significant shift in a major customer relationship. Without confirmation from the company, the potential impact on revenue and profitability remains unclear.For now, the sharp fall in Innodata shares marks a significant market move on the day the layoffs were reported, but further disclosures will be needed to establish the reasons behind the decline.- Ends