AI is changing job markets unevenly, and emerging economies are feeling the strain first. While AI skills often lead to higher pay, they haven’t yet created more jobs. Data shows that regions with higher AI adoption actually see fewer jobs in roles most exposed to automation, especially entry-level ones. In countries like India, where IT services have long depended on large workforces, AI is now forcing a shift away from headcount-driven growth toward efficiency, automation, and platform-based models.
In countries like India, where IT services have long depended on large workforces, AI is now forcing a shift away from headcount-driven growth toward efficiency, automation, and platform-based models.
As per the IMF, while people with AI skills often earn more, those skills haven’t translated into more jobs yet, unlike past waves of new technology. In fact, regions with higher demand for AI skills have seen fewer jobs in roles most exposed to AI, about 3.6% fewer after five years compared to areas with lower demand.
Read more: Work or Be Rewritten: How AI is Reshaping Jobs, Hiring & Power at Work
This is especially tough for young people just starting out, since entry-level roles are the most likely to be affected by automation. Early evidence from the US backs this up, showing that as generative AI spreads, companies are cutting back on entry-level hiring, particularly for jobs where tasks can be easily automated.
Last year, Indian outsourcing giant Tata Consultancy Services’ decision to cut over 12,000 jobs signaled the start of a broader AI-fueled trend that could end up eliminating around half a million jobs over the next two to three years from the $283 billion sector, say experts.
The TCS layoff wasn’t just a cost-cutting exercise, it was a bold statement. India’s $250 billion IT services industry, long celebrated for its sheer scale of manpower, is now finally rewriting the rulebook. The focus is moving from scale to efficiency, from benches to billables, and from the pyramid structure to platform-based models. TCS has become the first to pull the lever, clean cut, Gabbar style.
India Needs AI Talent
Countries like India are in need of AI talent to boost tech and economic impact right now. According to a report by Deloitte India and Nasscom, despite growing AI adoption across industries, the shortage of qualified professionals could slow innovation and growth.
The Indian AI talent demand is projected to grow from 600,000–650,000 to more than 1,250,000 during 2022–27. However, the AI market is expected to grow at 25%-35%, potentially signalling a demand-supply gap in the talent pool and a need for upskilling existing talent. Over the past year, 43% of the Indian workforce across sectors have used AI in their organisations. About 60% of workers and 71% of GenZs recognise that acquiring AI skills can enhance their career prospects.
Additionally, two of three Indians plan to learn at least one digital skill, with AI and Machine Learning (ML) topping the list. There will be a shift from trend and experience-based comprehension to knowledge and understanding-based comprehension. Furthermore, computation will transition from skill- and resource-dependent to access and collaboration-dependent. The focus of information will move from being descriptive to predictive.
Restructuring Work
The AI transition is not a simple story of job destruction or job creation, it’s a restructuring of work itself. Large layoffs, like TCS cutting 12,000 roles, signal the end of scale-at-all-costs hiring, even as demand for AI talent explodes.
“The stakes go beyond economics.” — IMF
For emerging markets, the risk is real, but so is the opportunity. Countries that invest quickly in AI education and upskilling can move from being outsourced labor hubs to creators of AI-driven businesses.
How much AI strengthens economies will rely on how ready workers and firms are for the transition. But, as the IMF says, “the stakes go beyond economics.” Work brings dignity and purpose to people’s lives. That’s what makes the AI transformation so consequential.
