India job scene sees early signs of disruption from AI

The Indian workforce is feeling the heat of taking over their jobs. Last week, digital payments company laid off 1,000 employees from its operations, sales and engineering teams due to what it said was “AI powered automation” aimed at cutting 10 15% employee costs. Globally, tech giant is reportedly undertaking a “restructuring” of its 30,000 odd sales team, as its AI campaign manager eliminates the need for human oversight.

Sportswear brand Nike has said it would slash hundreds of positions globally amid poor sales and expand automation to save $2 billion over the next three years. More than $400 million will reportedly be spent on Nike’s second round of layoffs, restructuring and employee severance. Experts believe these are early signs of job displacement in 2024, affecting roles that are anticipated to become redundant due to the growing adoption of AI.

As per market trends, more than 16 million working employees in India will need reskilling and upskilling due to AI's influence by 2027, HR services firm TeamLease Digital said. To be sure, some experts said the reskilling will also create millions of new opportunities in sectors such as manufacturing and retail in the next few years.

But for now, there could be some pain. “The possibility of large AI induced layoffs in the near term are real,” said Kamal Karanth, cofounder at staffing company Xpheno. “The past technology breakthroughs were also coupled with economic tailwinds; hence, more tech enabled jobs were created than lost.

However, AI is more transformational technology wise and has come at a time when two wars are being fought with global ramifications. So, the likelihood of AI related jobs that will get created may not be enough to dwarf the job losses created by AI's disruption,” he said. Vijay Sivaram, chief executive at Quess IT Staffing, said although AI innovation has been there for a while, its implications on the workforce are being felt only now because of rapid evolution in generative AI tools.

“We will continue to see AI replacing certain skills, especially among yesteryear engineers who have not been able to upskill,” Sivaram said. At a macro level, the IT hiring market is in itself in a slowdown, he said. “The ongoing job displacement is also playing out now due to over hiring that happened in the 2021 22 pandemic cycle.

And, therefore, organisations are looking at thinning their teams through AI automation wherever possible.” ET had previously reported that the big tech pack of ‘ amid the macroeconomic headwinds and global layoffs. These companies — Facebook (Meta Platforms), , , , and Google (Alphabet) — registered a 90% drop in active job postings in India so far in 2023 compared with last year, according to data put together for ET by Xpehno.

In fact, the combined current job postings by these companies at 200 is just 2% of what usually is the number in India. Cumulatively, the top four Indian IT companies — , , HCLTech and Wipro — have cut down their headcount by 37,299 over the past two quarters. This compares to an addition of 81,678 jobs during the first half of fiscal 2023.

Vikram Ahuja, CEO of hiring solutions provider Talent500, said IT support services and routine software development have started to see a change in opportunities. “Organisations have started to explore chatbots and customer support products which will help them drive higher productivity and conversion,” he said.

Conversely, AI has positively impacted sectors such as advanced tech (AI development, machine learning), healthcare (AI assisted diagnostics) and finance (algorithmic trading, fraud detection), he added. Munira Loliwala, assistant vice president (strategy and growth), TeamLease Digital, said the need for reskilling 16 million employees will also create more than 4.7 million new opportunities by 2027, across manufacturing, retail, education, finance & insurance.

The manufacturing sector alone is expected to add nearly 1 million new tech jobs led by AI. “Roles in application developers, data analysts and platform owners will be the most sought after skills … Slightly over 50% of these roles are expected to fall in manufacturing, retail / consumer and healthcare sectors that involve substantial amounts of repetitive work that lends itself to automation.

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