A comprehensive new report from the Indian Council for Research on International Economic Relations (ICRIER) is challenging the doomsday narrative surrounding artificial intelligence and employment. Contrary to dire predictions from tech luminaries like Elon Musk and IMF officials, the study “AI and Jobs: This Time Is No Different” reveals that India’s IT sector—ground zero for AI disruption—is adapting remarkably well to the technology revolution.
The Surprising Reality on the Ground
Between November 2025 and January 2026, ICRIER surveyed 651 IT firms across 10 Indian cities, from startups to major corporations. The findings paint a picture far more nuanced than the apocalyptic forecasts dominating headlines. While 65% of firms reported moderating their hiring pace, total employment in the sector continues to grow. This isn’t job destruction—it’s workforce transformation.
AI Is Creating Winners, Not Casualties
Here’s where the study gets really interesting: the jobs most exposed to AI are actually experiencing the strongest growth in demand. Software analysts, application developers, and statisticians—roles that AI supposedly threatens—are seeing increased hiring. The report found a clear positive correlation between AI exposure and job demand, suggesting AI functions as a complement to skilled workers rather than a replacement.
Meanwhile, entry-level positions are seeing slower hiring (55% of firms report declines), but mid-level technical roles are booming, with 42% of firms increasing these positions.
The Profit Center Advantage
The research reveals a critical distinction: divisions treated as profit centers—primarily software development and engineering—are experiencing minimal job losses despite maximum AI impact. In contrast, support functions and cost centers like HR, legal, and finance are seeing larger employment contractions. It’s not about whether AI can do the job; it’s about where the job sits in the value chain.
Productivity Gains Are Real
Firms report tangible benefits from AI adoption. Among business divisions most affected by AI, 38% experienced simultaneous decreases in team size and increases in output—the textbook definition of productivity gains. Cost reductions paired with output increases were reported by 31% of divisions, with productivity winners outnumbering losers by a 3.5-to-1 margin.
The Skills Gap Remains the Real Challenge
Despite these encouraging findings, the report sounds important warnings. Only 4% of IT firms have trained more than half their staff in AI-related skills. The biggest obstacles? Finding qualified trainers (70% of firms), high costs (68%), and organizational readiness (44%). Prompt engineering and generative AI capabilities top the skills wish list at 68% of firms, followed by data analytics (36%) and data science (35%).
Looking Ahead
Most firms don’t foresee dramatic changes: 44% expect stable employment over the next two years, 28% anticipate growth, and just 27% predict declines. The industry sees the government’s primary role as providing stable policy and regulation (70% and 65% respectively) rather than direct financial support.
The Bottom Line
This research supports a familiar historical pattern: transformative technologies eliminate specific tasks while creating more jobs than they destroy. The evidence suggests generative AI is fundamentally transforming industries—but there’s no indication that “this time is different.” For workers willing to adapt and acquire new skills, the AI era may present more opportunities than threats.
The study acknowledges limitations—it can’t predict the impacts of artificial general intelligence or the rapid scaling of humanoid robots—but, for now, the data suggests we should worry less about AI stealing jobs and more about preparing workers for the jobs AI is creating.