Study Reveals AI’s Impact on Work Dynamics Rather Than Mass Layoffs
A recent study conducted by the Indian Council for Research on International Economic Relations (ICRIER) and supported by OpenAI has provided a fresh perspective on the impact of artificial intelligence (AI) on employment in India’s IT sector. Contrary to fears of widespread job losses, the report indicates that generative AI is not causing mass layoffs but is instead transforming job roles and enhancing productivity. The findings suggest that while hiring has slowed at entry-level positions, demand for skilled professionals remains strong, signaling a shift in how work is organized in the industry.
Survey Insights from 650 IT Firms
The ICRIER study, titled “AI and Jobs: This Time is No Different,” is based on a comprehensive survey of 650 IT firms across ten major Indian cities, conducted between November 2025 and January 2026. The research focused on various aspects, including hiring trends, changes in job demand, productivity outcomes, and workforce skill development. The results revealed that while there is a slight slowdown in entry-level hiring, recruitment for mid and senior-level positions has remained stable. This trend aligns with broader post-pandemic patterns in the IT sector and cannot be solely attributed to the adoption of AI technologies. The study emphasizes that AI is enhancing productivity and reinforcing the importance of skilled professionals rather than replacing them.
AI as a Productivity Enhancer
The findings of the study challenge the notion that certain job roles are at risk of automation. Notably, positions such as software developers and database administrators, often perceived as vulnerable, are experiencing significant growth in demand. The research highlights that generative AI serves as a productivity-enhancing tool that complements technical and analytical tasks rather than acting as a substitute for human workers. Ronnie Chatterji, chief economist at OpenAI, noted that the integration of AI is reshaping work dynamics, emphasizing the need for workers to adapt their skills to align with advancing AI capabilities. Currently, only a small percentage of firms have trained a significant portion of their workforce in AI, indicating a substantial opportunity for growth in this area.
Reassurance for Policymakers
Shekhar Aiyar, director and chief executive of ICRIER, commented on the ongoing debate surrounding AI and employment, stating that the study provides concrete evidence to inform the discussion. He acknowledged that while there are many opinions on the subject, the research combines survey data with in-depth interviews from industry leaders to assess the true impact of generative AI on the workforce. Aiyar expressed that the results should reassure Indian policymakers about the current state of the IT sector‘s adaptation to AI. However, he cautioned against complacency, noting that many firms are still unprepared for future changes that AI may bring. The study underscores the importance of proactive measures to ensure that the workforce is equipped to thrive in an evolving technological landscape.
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