AI Reshapes Demand
Artificial intelligence is set to reduce the amount of routine work performed across the IT services industry, but it will also temper the pace of hiring, Genpact chairman and chief executive NV 'Tiger' Tyagarajan said on Thursday, underscoring a structural shift that is already beginning to alter India's technology labour market.
Tyagarajan's remarks point to a familiar but increasingly urgent theme in the sector: AI is not merely a productivity tool, but a force that is changing the composition of work itself. As companies deploy automation more aggressively across software development, customer support, operations and analytics, the need for large pools of entry-level and repetitive-process labour is likely to diminish. That, in turn, could slow the long-running expansion of white-collar employment that has helped power India's services economy.
He said the employment growth rate has already started to dip, and the percentage addition of employees in India will not remain at the levels seen in the past. The implication is significant for an industry that has historically relied on scale, labour arbitrage and steady headcount expansion to deliver growth. AI, by contrast, rewards firms that can do more with fewer people, especially those with advanced technical and domain skills.
Hiring Becomes Selective
Tyagarajan's comments also highlight a broader transition underway in the Indian IT and business services ecosystem. As automation tools become more capable, companies are likely to hire more selectively, prioritising employees who can design, supervise and improve AI-enabled workflows rather than simply execute them.
That shift does not necessarily mean a collapse in employment, but it does suggest a change in the type of jobs being created. Demand is expected to rise for professionals with stronger analytical, engineering and product skills, while demand for routine process roles may weaken. For India, where the technology sector has long served as a major engine of formal job creation, the consequences could be wide-ranging.
The comments come at a time when global technology spending remains uneven and clients are pressing vendors to deliver efficiency gains. In that environment, AI adoption is increasingly being framed not as an optional upgrade but as a core operating requirement. For firms such as Genpact, which provide digital operations and business process services, the pressure to automate is especially intense because many of their offerings are built around repeatable workflows.
Tyagarajan's assessment also reflects a reality that policymakers and industry leaders have been discussing for months: the future of IT employment in India will depend less on the sheer volume of hiring and more on the quality of skills being added. The country's large talent base remains an advantage, but it will need to be continuously upgraded to stay relevant as AI systems take over more tasks.
Skills Over Scale
The most important message in Tyagarajan's remarks is that the industry's growth model is changing. The old formula of adding large numbers of employees to meet rising demand is becoming less central as technology improves productivity. In its place is a model that values specialised expertise, adaptability and the ability to work alongside AI tools.
For workers, that means the premium on upskilling is likely to rise. For employers, it means training, reskilling and workforce redesign will become strategic imperatives rather than human resources exercises. And for India, it raises a bigger question: whether the country can continue to convert its technology advantage into broad-based employment growth if AI compresses the number of people needed to deliver the same amount of work.
Tyagarajan did not suggest that AI will eliminate the need for human workers. Rather, he indicated that the nature of work will change, and with it the scale of hiring. The industry, he suggested, will need a workforce with higher skill sets to remain competitive in an AI-driven environment.
That warning is likely to resonate across India's IT and outsourcing sectors, where companies are balancing cost pressures, client demands and the need to invest in next-generation capabilities. The message from Genpact is clear: AI may make operations leaner, but it will also make the labour market more selective, and the days of broad-based employment expansion may be fading.