AI not causing mass layoffs, but changing nature of work: Study

A new study by the Indian Council for Research on International Economic Relations (ICRIER), supported by OpenAI, has sought to ease concerns about large-scale job losses due to artificial intelligence.

According to the report, generative AI is not triggering mass layoffs in India’s IT sector at present. Instead, it is reshaping how work is organised, improving productivity and transforming job roles.

Survey across 650 IT firms

The findings are based on a survey of 650 IT firms across 10 Indian cities, conducted between November 2025 and January 2026. The study examined hiring trends, changes in occupational demand, productivity outcomes and workforce skilling patterns.

Titled ‘AI and Jobs: This Time is No Different’, the study concluded that AI is amplifying output and strengthening the role of skilled professionals rather than replacing them.

Firms reported a modest slowdown in hiring, mainly at the entry level, while recruitment at mid and senior levels has remained stable.

Researchers noted that this moderation is in line with broader post-pandemic trends in the IT sector and cannot be attributed solely to AI adoption.

Productivity boost, not job wipeout

The study found that roles widely seen as vulnerable to automation, such as software developers and database administrators, are in fact among those seeing the strongest growth in demand.

It said generative AI is acting as a productivity-enhancing tool that complements technical and analytical work, rather than serving as a substitute.

Ronnie Chatterji, chief economist at OpenAI, was quoted by news agency PTI as saying, “We are seeing a shift in how work is organised, where AI appears to be complementing human talent. This data offers a window into the transition underway in India”.

He added that the focus should now shift to helping workers adapt. “Focus now should be on the practical steps needed to help workers align their skills with the advancing capabilities of AI. Currently, only 4 per cent of firms have trained more than half their workforce in AI, presenting a huge opportunity for growth.”

Policymakers reassured, but no room for complacency

Shekhar Aiyar, director and chief executive of ICRIER, said the debate around AI and jobs often involves strong opinions, but the study brings concrete evidence to the discussion.

“Everyone has opinions on this matter,” he said, adding that the ICRIER-OpenAI research “brings evidence to the table”.

He noted that the authors combined survey data with in-depth interviews of leaders in the Indian IT industry to assess the real impact of generative AI.

“The results should reassure Indian policymakers without inducing complacency,” Aiyar said, cautioning that while the IT sector appears to be handling AI adoption reasonably well, many firms are still not fully prepared for future shifts.