Moneycontrol Pro Panorama | India won’t be spared the AI Jobs reset

In today’s edition of Pro Panorama: War clouds over L&T earnings, new sparkle for commodities, freebies ruling the day, patience premium in bond market and much more

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Dear Reader,

Have you noticed that, of late, reports of job cuts are unusually on the rise? And most of these reports mention the term ‘AI’ in one way or the other? Probably, we have stopped noticing such reports since these are too frequent now. But this is probably the biggest shift happening in the global job market in decades. The AI threat is real.

And the advanced AI systems can replace almost every job in the world, including the sector journos like me cover.

Let me cut to some recent examples. Yesterday Bloomberg reported that Paypal’s new CEO plans job cuts as part of a new strategy. Some other companies, like Coinbase, too are planning job cuts. All are citing AI use.

Back in India, we have a temptation to watch global layoffs as ‘foreign’ news or distant tremors. This is a mistake. What is unfolding now is not a sectoral adjustment but a structural reset in how companies operate. India sits right in the middle of it—just that some of us are blissfully unaware of it.

Work that earlier took large teams is now being handled by smaller groups armed with AI tools. Layers are being stripped out. The unit of productivity is no longer the team, but the individual augmented by machines. Once that logic takes hold, geography becomes irrelevant.

If a task can be automated in San Francisco, it can be automated in Bengaluru, Hyderabad or Cochin just as easily.

How did we come to this point? It is by design. For two decades, the country has built a services economy that thrives on scale — IT services, back-office processing, customer support, financial operations. The model works on labour arbitrage and process efficiency. AI has attacked both.

Let’s take IT services. The core basis functions of a typical IT company such as testing, maintenance, code migration are precisely where AI is most effective. A smaller, sharper team can now deliver what earlier required benches of engineers. Billing models built on headcount will come under pressure. Margins will not collapse overnight, but the direction is clear: fewer people per project, higher expectations per employee.

This isn’t just about IT. Move to financial services and fintech — You can see the same trend there as well. Compliance checks, fraud detection, underwriting, even basic advisory are already being automated. The same forces that are pushing job cuts at Coinbase and PayPal will play out in Indian banks, NBFCs and startups. The difference is that Indian firms typically tend to move slower, not that they move differently.

Business process outsourcing can also be hit badly. This is where the impact could be most visible. Voice support, data entry, routine reconciliation are not future risks; they are current targets for automation. Companies that once scaled by adding seats will now be forced to scale by adding capability.

As I mentioned above, forget IT and Fintech, even the media industry is not insulated. We discuss this in newsrooms a lot. Drafting, research, basic analysis, a large part of the workflow can now be shifted to AI. What remains valuable will be judgement, access and original reporting. Everything else is at risk of being commoditised.

I’m not saying jobs are disappearing overnight. But what can happen is hiring will slow in exactly the sectors that have been absorbing talent at scale. Freshers will feel it first. Lateral hiring could tighten next.

So, what to do now? A rethinking of growth strategies will be warranted at this stage.

Indian companies have traditionally equated growth with headcount. That equation is breaking down. Investors are already rewarding efficiency over expansion. Managements will follow. The new metric will be output per employee, not number of employees.

Employees need to update themselves with AI skills or risk losing their jobs. Governments must introduce AI capabilities in the young workforce from the start and prepare them to face the tough competition.

Much of India’s economic planning still assumes that services exports will keep generating jobs at the same pace. That assumption needs a rethink, too.

The question is not whether AI will affect jobs in India. It is already happening. The real question is whether India adjusts early or reacts late and defensively. Let’s hope the former happens.

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