A new OpenAI-backed ICRIER study reveals AI is not causing mass layoffs in India’s IT sector but transforming roles, boosting productivity, and pushing companies to prioritize upskilling initiatives.
Published: February 15, 2026 7:38 AM IST
The study sponsored by OpenAI, an artificial intelligence research lab, and Indian Council for Research on International Economic Relations (ICRIER) found that AI technologies are transforming the nature of work instead of eliminating jobs in India’s US$280 billion information technology (IT) sector.
AI not causing large-scale layoffs in Indian IT sector
AI adoption has accelerated across companies, however, contrary to the expectation that automation would lead to job cuts, AI is helping firms reimagine workflows and deliver higher quality output.
According to the study conducted by surveying over 650 IT companies operating in India’s top ten metros, AI has made only marginal changes to hiring at entry-levels while demand for mid- and senior-level talent continues to grow.
AI Improving productivity across Indian companies
Perhaps the most important finding in the report is that AI tools are helping employees work faster and smarter. From generating code to creating AI prompts, workers are using AI-powered tools to complete tasks quicker freeing up time for them to work on more strategic initiatives.
Across Indian companies, AI is helping teams improve efficiency, allowing companies to scale without adding additional workforce, helping firms to compete better in overseas markets. These gains in productivity are being witnessed across services such as software development and analytics.
Upskilling remains a concern for companies
Acknowledging the importance of skill development for Indian workforce to keep pace with rapidly advancing technologies, the report found that only around 4% of respondents have trained over 50% of their staff in AI skills.
To meet the growing demand of more skilled talent, it will be important for companies to focus on training employees to work with AI technology. Experts think new roles will require “hybrid skills” with greater emphasis on both technology and human skills. Policymakers and businesses need to offer relevant training programs to their employees.
AI will be working along with humans not instead of them
The report comes at a time when fear of automation and robots replacing humans have created concern about AI technologies causing unemployment. However, as per the research report AI is creating new opportunities for IT sector employees and “working alongside” them to deliver higher quality work.
Also Read:
Disclaimer : This story is auto aggregated by a computer programme and has not been created or edited by DOWNTHENEWS. Publisher: india.com
