AI Layoff Myths Debunked: Insights from 10-City Study

The findings indicate that while hiring has slowed, especially at the entry level, overall employment in the IT sector continues to rise. There is an increasing demand for mid-level roles, and senior positions remain stable. Contrary to fears, jobs traditionally deemed most susceptible to AI—such as software developers, analysts, and database administrators—are witnessing the strongest growth in demand, according to the report.

The researchers argue that this trend demonstrates AI’s function as a tool for enhancing productivity rather than as a direct threat to skilled jobs. In a survey of nearly 1,900 business divisions, those reporting productivity increases greatly outnumbered those experiencing declines, at a ratio of 3.5 to 1. About one-third of these divisions noted higher outputs while managing to reduce costs, highlighting how AI is enabling firms to scale efficiently without cutting their workforce.

Additionally, the report emphasizes an evolving landscape in hiring needs. Approximately 63% of firms recognize a growing demand for employees who possess hybrid skill sets—blending domain knowledge with AI or data competencies. Skills like prompt engineering, data analytics, and machine learning have become increasingly desirable.

Nevertheless, the study points out significant gaps in workforce readiness for this new era. Even though more than half of the surveyed companies have initiated AI awareness or training programs, only 4% have successfully trained over half of their workforce in AI-related skills. Challenges such as high training costs, difficulties in sourcing qualified trainers, and the overall preparedness of organizations present major obstacles.

Overall, the report suggests that the surging global demand for AI-driven services will likely result in job creation within India’s IT sector moving forward. Rather than a job crisis, the industry appears to be experiencing a transformation, as employees adapt by learning new skills and transitioning into emerging roles in the expanding digital economy.