India’s $ 250 billion information technology sector, which was expected to double its workforce by 2030 will likely miss the target, according to industry experts. An ongoing cyclical slump in demand for technology services as well as the more long-term threat of artificial intelligence-induced job losses could see the sector employ just about 7.5 million by the end of the decade from the current level of 5.4 million employees, according to data from a top hiring firm.Recruitment consultancy Team Lease Digital had earlier estimated that the Indian IT workforce would expand to 10 million by 2030.Elevate Your Tech Prowess with High-Value Skill CoursesOffering CollegeCourseWebsiteMITMIT Technology Leadership and InnovationVisitIndian School of BusinessISB Professional Certificate in Product ManagementVisitIndian School of BusinessISB Product ManagementVisitAI-based automation is the significant factor impacting headcount, while macroeconomic factors are cyclical with a revival likely in 2025, said Ganesh Natarajan, former CEO of Zensar Technologies and founder of 5F World, a digital transformation solutions company.Pointing to the impact of AI on areas such as testing, he said “with ChatGPT and GenAI (generative AI), coding is also getting destroyed.”Further, maintenance of IT systems will also be taken over as “it’s very easy for a GenAI application to find out the problem and resolve it,” he added.As a result, these roles, which account for nearly 60% of all IT jobs, could drop precipitously to 15%.Discover the stories of your interestBlockchain5 StoriesCyber-safety7 StoriesFintech9 StoriesE-comm9 StoriesML8 StoriesEdtech6 StoriesIndustry experts are of the view while economic slowdowns are a temporary phenomenon the bigger challenge for the Indian IT services industry is the technology disruption with AI becoming centre stage.There is a ‘tectonic shift’ underway from growth driven by labour arbitrage to AI-driven tech arbitrage, according to Arvind Thakur a member of the Board of Management at NIIT University who reckons the industry is at an ‘inflection point’.AI will, however, also deliver an additional 50-60% increase in productivity, he noted.Headcount DipsIndia’s top four IT companies – Tata Consultancy Services, Infosys, Wipro and HCLTech – reported a combined headcount drop of over 50,000 at the end of the third quarter of FY 24, compared to the previous period. Experts are of the view that there is a slowdown in headcount addition as the industry transitions from ‘run the business’ to ‘change the business.’In its heyday, during the massive digital adoption induced by the pandemic, the IT industry had ramped up hiring significantly. Now, as it faces increasing headwinds, “the base of 5.4 million (employees) is considerably challenged,” Munira Loliwala, AVP – strategy and growth, TeamLease Digital, told ET. AI ImpactEven as the technology hiring industry braces for AI-driven efficiency leading to short-term pressure on revenue and headcount additions, there will be an uptick in demand for AI-ready skills eventually, said Vineet Nayar, former HCL Technologies CEO.India’s robust startup ecosystem, growing focus on semiconductors and embedded technology, as well as continued expansion in segments like healthcare and engineering is also expected to contribute to IT job creation.“The internet business and advancements in GenAI, IoT, and Big Data are experiencing significant hiring intent, around 20%. This indicates a sustained demand for skilled professionals in these areas,” said Kapil Joshi, deputy CEO, Quess IT Staffing.
