India’s IT sector is adapting to generative AI without mass job losses, new study finds

According to the study, while hiring has slowed, particularly at the entry level, overall employment in the IT sector has continued to grow. Mid-level roles are seeing increased demand and senior positions continue to remain stable. Jobs that were often assumed to be most vulnerable to AI, such as software developers, analysts, and database administrators, are among those experiencing the strongest demand growth based on the report.

The researchers claim that this reflects AI’s role as a productivity-enhancing tool rather than a direct replacement for skilled workers. Across nearly 1,900 business divisions surveyed, units reporting productivity gains significantly outnumbered those seeing declines, by a ratio of 3.5 to 1. Nearly one-third of divisions reported higher output alongside lower costs, suggesting that AI is helping companies scale more efficiently without reducing headcount.

The report also highlights a tangible shift in hiring priorities. About 63 per cent of firms admitted that demand is rising for workers with hybrid skill sets, combining domain expertise with AI or data capabilities. Skills such as prompt engineering, data analytics, and machine learning are now among the most sought after.

However, the study also flags gaps in workforce preparedness. While more than half of surveyed firms have launched AI awareness or training initiatives, only four per cent have trained more than half of their workforce in AI-related skills. Companies cited high costs, difficulty finding qualified trainers, and organisational readiness as key barriers.

The report shows growing global demand for AI-powered services is likely to create more jobs in India’s IT sector over time. Instead of a jobs collapse, the industry is seeing a shift, with workers adapting, learning new skills, and moving into newer roles as the digital economy expands.