The advancement of artificial intelligence (AI) tools like ChatGPT and Copilot is creating turbulent times for the Indian IT industry. Vineet Nayar, industry veteran and former CEO of IT giant HCL Technologies, sounds the alarm bells he believes these AI advancements could force Indian IT companies to reduce their workforce by a staggering 70%.
Core IT Skills Becoming Obsolete
According to Nayar, the core skills currently utilized by IT professionals are at grave risk of becoming obsolete as AI capabilities advance. “Employee skills like coding, testing, maintenance, responding to support tickets, all that will be handled by AI. These skills will become obsolete,” he warned.
Retain or Replace Staff?
With AI tools becoming highly efficient at human-level tasks, Indian IT firms will face high pressure to reduce workforce costs by letting go of experienced, higher-paid staff. However, Nayar firmly believes go ahead on aimless firing would be unethical and potentially devastating for the industry long-term.
He strongly cautions against the enticing prospect of replacing seasoned professionals with fresh, low-cost graduates trained on AI skills. “Discarding existing staff and hiring fresh graduates at low cost would be unethical and disastrous for India’s IT sector down the line,” Nayar highlighted.
Upskilling the Existing Workforce is Key
Instead, the former CEO advocates Indian IT companies prioritize upskilling their current employees to adapt to the AI revolution. He reasons that since AI promises to increase revenues and profits, firms have no excuse to not invest in reskilling initiatives for their staff.
“The ethical path for companies is to take their employees along on this journey,” Nayar urged. “If firms reengineer and recalibrate staff for higher-order skills, they will have resources to reskill existing people.”
Potential Upsides of Using AI
While Nayar’s workforce reduction prediction may seem alarming, he highlights massive opportunities that AI affords Indian IT firms to become more strategically invaluable to clients.
“With AI, Indian IT will get closer to the customer’s end-customer, enhancing our relevance,” he explained. “We will be in the boardrooms, far more strategically crucial for clients…no longer just the back-office supporting functions.”
A Cautionary Way Forward
Nayar advises Indian IT companies to pause and carefully consider their approach, rather than reflexively pursuing cost-cutting by firing experienced staff and replacing them with fresh AI-skilled hires. Such shortsighted actions, he cautions, may severely backfire long-term.
As tools like ChatGPT, Gemini and Copilot penetrate industry functions like coding, testing and content creation, their employment impacts can no longer be ignored. The past year alone has seen significant layoffs influenced by AI-driven productivity gains.
Nayar’s Roadmap for Indian IT firms
| Strategy | Recommendation |
|---|---|
| On Workforce | Avoid unethical mass layoffs. Upskill existing employees instead of hiring fresh graduates. |
| Using AI | Use AI to increase strategic value and get closer to end customers. |
| Controlling Costs | Don’t instinctively fire experienced staff. Explore sustainable solutions. |
| Long-term Success | Reskill workforce for “higher-order skills” to maximize AI’s benefits. |
As the AI revolution upends the tech industry, heeding advice from stalwarts like Vineet Nayar could prove crucial for Indian IT firms navigating these turbulent technology-driven times.