The Indian economy witnessed a tremendous transformation in the 1990s, wherein IT emerged as a significant growth driver. IT created millions of job opportunities and catapulted India into a global tech superpower. However, this booming industry is facing an existential threat in the recent past. The emergence of Generative AI has endangered traditional IT jobs.
The Indian tech sector is, thus, undergoing a tremendous transformation with Generative AI. It has automated tasks in software development, data analytics, and customer service. Thus, making certain repetitive or rule-based jobs obsolete. This double-edged sword is forcing both Indian companies as well as tech professionals to adapt to the rapidly changing employment landscape.
Let’s delve deeper into the evolution of the Indian tech sector and GenAI’s impact on it.
The Indian IT industry was for long considered a sector of steady growth is now sending out alarm signals through stagnation.
According to an ET report, the total number of tech job layoffs in 2024 is over 136,000 across 422 companies, underscoring the industry's ongoing volatility. Major players like Infosys, Tata, and Wipro have made significant job cuts this year.
GenAI has been termed as being responsible for this shift. This revolution may be unique in all its senses, but it is creating turbulence in the age-old roles that form the bedrock of Indian IT.
In 2024. the three leading Indian software services companies, Infosys, and Tata Consultancy Services (TCS) saw a decrease in headcount by 5.4 percent as per a report by the recruitment firm TeamLease. These tech giants hiring large numbers of fresh graduates for years are now making cuts. This signals the start of a structural change in tech companies.
TCS has stated that it would focus more on GenAI in the future aiming to raise its AI-related deals to US$900 million. The other big contenders, Wipro and Infosys, have also adopted GenAI. While this shift is for the cost of efficiency, it would also result in job cuts.
However, not all tech companies are looking to fire, some are focusing on reskilling their employees. Infosys, for example, is working on over 200 GenAI-driven projects and aims to reskill six out of every eight employees.
Despite the call to reskill, growth in traditional IT jobs has slowed sharply. Estimates by TeamLease place the growth in the workforce only at around 7-8%, lower than at any time in history. Much of this slowdown is because of the rapidly adopted Generative AI technologies. These technologies, on the one hand, need a smaller number of workers but on the other, need a specialized workforce.
1. Impact of Job on Junior Software Developers
Software development is one of the Indian tech industry's most robust sectors, employing millions. However, GenAI tools like GitHub, Copilot, Tabnine, and OpenAI Codex now increasingly write and debug code with little to no human oversight. This poses direct threats to entry-level programming jobs.
Simple coding tasks that were once conducted by fresher graduates are now being done by generative artificial intelligence. Where productivity is the name of the game, companies are opting for AI tools rather than spending on a huge team of junior coders.
For instance, Infosys and TCS are utilizing AI-based software development tools and have reduced hiring entry-level developers to the extent of 30-40% for repetitive coding work.
Although GenAI is killing the old traditional IT jobs, it is also creating new, specialized roles. According to tech companies, there is a growing demand for AI expertise but a huge gap in skills. Operations are expected to change with AI and require a different skill set than previous technologies such as cloud computing.
2. IT Support Jobs Decline
India is considered a global hub of IT support, providing help desk and customer services for businesses worldwide. Now, AI chatbots and virtual assistants are automating up to 70% of those interactions, in particular for repetitive first-line support queries.
Indian tech companies such as Tech Mahindra and Wipro are leveraging GenAI tools, which deal with common customer queries, technical fixing, and servicing demands. This has resulted in massive job cuts in IT customer services.
For example, Wipro, by using AI-powered chatbots and automated support systems, has reduced customer service roles by 50 percent during the previous year. It is now focused on building automated service systems.
3. Data Entry and Simple Data Analytics Roles Reduced
There used to be many data entry and simple data analytics jobs available in India. However, with GenAI tools like ChatGPT and Google Bard that can generate insights and summarize big data, manual data handling jobs are rapidly becoming an anachronism.
Wipro and HCL Tech have reported automation of data processing and analysis tasks with a 30% reduction in manual data entry roles.
Although making traditional tech jobs obsolete, GenAI is opening up other new job areas. These often require higher degrees of expertise than previous occupations. The focus is on AI system development, governance, and ethics in the new Indian tech job roles.
1. AI Engineers/Developers
Today all businesses have well-integrated AI into their operations. This creates a demand for skilled AI engineers to design, build, and maintain GenAI systems.
There is a growing demand for AI developers and engineers in companies like TCS, Wipro, and Tech Mahindra. These roles include new algorithm development, training AI models, and developing AI-based applications for clients.
Example: TCS recently vowed to hire over 10,000 AI engineers in the next two years to drive global expansion into GenAI technologies.
2. AI Governance and Ethics Jobs
The more AI systems take on essential roles in business, the more professionals are required to make sure that these AI tools function ethically and without bias.
Indian tech companies are also increasingly hiring AI ethicists, AI compliance officers, and AI auditors to prove that their systems are following the appropriate ethical standards and global regulations.
For instance, HCL Technologies is now hiring AI governance professionals to evaluate whether its AI systems conform to global norms of data privacy.
3. Data Annotators and AI Trainers
GenAI technologies require big labeled datasets or data annotation. Thus, GenAI has created new roles, called data annotators as well as AI trainers, who prepare training data for AI models.
Infosys and many more such companies are hiring data annotators to train their machine-learning models. These professionals enable AI to understand the tasks they are being designed to automate within a certain context and respond accordingly.
Tech Mahindra recently launched a new data annotation service that will provide high-quality labeled data for global AI firms.
Generative AI is transforming the Indian tech job market immensely. It is bringing with it new and exciting areas to work in like AI development, AI ethics, and data annotation, etc. On the other hand, generative AI is replacing many traditional jobs in software development, IT customer service, entry, etc. As Indian companies increasingly take up GenAI to streamline the flow of operations and reduce costs, demand for skilled AI professionals will go up. However, lower-skill requiring jobs may continue to decline.
Start upskilling now to keep up with the changing tides in the Indian tech sector!