Generative AI Transforms Tech Jobs Instead of Eliminating Them, Major Study Reveals

India's technology sector is experiencing a fundamental shift as generative AI reshapes work patterns, but widespread job losses aren't materializing as predicted. A comprehensive ICRIER study, supported by OpenAI and covering 651 IT firms across 10 Indian cities, challenges assumptions about AI's impact on employment.

The research reveals that while 65% of companies have moderated hiring after adopting AI tools, total employment in the sector continues expanding. Rather than wholesale job replacement, AI appears to complement higher-skill technical roles while reducing demand for routine functions.

Entry-Level Positions Face the Biggest Changes

The clearest transformation is occurring at junior levels, where firms are becoming more cautious about hiring fresh graduates for basic coding and support tasks that AI can now automate or assist. However, demand for mid-level engineers, specialized analysts, and professionals who can integrate AI into workflows is actually rising.

Occupations with the highest AI exposure—including software analysts and application developers—are seeing the strongest demand growth, contradicting fears of widespread displacement.

Key findings from the comprehensive study:

• Mixed hiring patterns - Entry-level recruitment slowing while mid-level and specialized roles expand
• Revenue vs. support divide - Core technology divisions maintaining employment while back-office functions contract
• Skills evolution - Growing need for hybrid capabilities combining technical knowledge with AI integration
• Efficiency gains - Companies report faster turnaround times, improved output quality, and significant cost savings

The research highlights a critical skills gap: despite widespread AI tool adoption, only 4% of surveyed firms have trained more than half their workforce in AI-related capabilities. A shortage of qualified trainers affects 70% of companies, while 68% cite high costs and uncertain returns as training barriers.

As the authors note, the data suggests change is unfolding gradually. Generative AI is altering how work is organized and what skills are valued, but there's little indication of employment collapse. The real challenge lies in whether workers can keep pace with rapidly evolving skill requirements.