Amid ongoing concerns that artificial intelligence could replace human jobs, new research suggests a more balanced reality for India’s technology sector. A study conducted by the Indian Council for Research on International Economic Relations and supported by OpenAI shows that generative AI is improving productivity while employment levels continue to grow rather than decline.
The report, titled AI and Jobs: This Time Is No Different, is based on a survey of more than 650 IT firms across 10 Indian cities between November 2025 and January 2026. It offers one of the most detailed firm-level analyses of how generative AI is influencing hiring trends, productivity, and skill demand in the country’s IT industry.
According to the findings, hiring has slowed, especially for entry-level roles. However, overall employment in the sector continues to expand. Demand for mid-level professionals is increasing, while senior roles remain stable. Jobs often considered vulnerable to automation, including software developers, analysts, and database administrators, are among those witnessing the strongest demand growth.
Researchers noted that AI is functioning more as a productivity-enhancing tool than a replacement for skilled workers. Across nearly 1,900 business divisions surveyed, units reporting productivity improvements outnumbered those experiencing declines by a ratio of 3.5 to 1. Nearly one-third of divisions recorded higher output along with lower operational costs, indicating companies are scaling efficiently without reducing headcount.
The study also highlights changing hiring priorities. Around 63% of firms reported rising demand for professionals with hybrid capabilities that combine domain expertise with AI or data skills. Prompt engineering, data analytics, and machine learning are emerging as some of the most sought-after competencies.
Despite this shift, workforce readiness remains a challenge. More than half of the surveyed firms have introduced AI awareness or training programs, yet only 4% have trained over half of their employees in AI-related skills. Companies identified high training costs, limited availability of qualified trainers, and organisational readiness as key barriers.
The report concludes that increasing global demand for AI-powered services is likely to generate more employment opportunities in India over time. Instead of job losses, the industry is witnessing a transition, with professionals adapting to new roles as the digital economy expands.
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