In this digital age dominated by AI, where fears of machines taking over jobs lurk large, contradicting findings from India offer some reassurance. A new study by the Indian Council for Research on International Economic Relations (ICRIER), supported by OpenAI, reveals that generative AI is transforming work and enhancing productivity but is not causing mass layoffs in India.
Titled AI and Jobs: This Time Is No Different, the report draws on a survey of more than 650 IT firms across 10 Indian cities, conducted between November 2025 and January 2026. It offers a comprehensive firm-level analyses of how generative AI is reshaping hiring, productivity, and skill demand in India’s technology sector.
Contrary to fears of widespread layoffs, the study finds that overall employment in the IT sector continues to grow, even as entry-level hiring has slowed. Mid-level roles are witnessing rising demand, while senior positions remain stable. Jobs often considered most vulnerable to AI such as software developers, analysts, and database administrators, are among those experiencing the strongest growth in demand.
The report underscores that AI is acting as a productivity-enhancing tool rather than a direct replacement for skilled workers. Surveying nearly 1,900 business divisions, researchers found that units reporting productivity gains outnumbered those seeing declines by a ratio of 3.5 to 1. Around one-third of divisions reported higher output with lower costs, indicating that AI is helping companies scale efficiently without cutting jobs.
Key findings from the report include:
Shift in Hiring Priorities: 63% of firms report rising demand 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 increasingly sought after.
Workforce Preparedness Gaps: While over half of firms have launched AI awareness or training initiatives, only 4% have trained more than half their workforce. Barriers include high costs, scarcity of qualified trainers, and organizational readiness.
Job Growth Outlook: Global demand for AI-powered services is expected to create more IT jobs in India. Rather than a job collapse, the sector is witnessing a shift, with workers adapting, learning new skills, and moving into newer roles in the expanding digital economy.
