MUMBAI: At the AI Impact Summit, former HCL Technologies CEO Vineet Nayar issued a stark warning that IT firms are poised to prioritize profitability over job creation as the artificial intelligence (AI) boom accelerates. He argued the current wave of AI adoption, deployed at unprecedented scale and speed, leaves insufficient time for workforce adaptation, potentially worsening job losses in the sector. "Shareholder returns dominate corporate agendas," Nayar stated, highlighting a disconnect between technological progress and employment generation.
Nayar pointed to the IT industry’s rapid shift toward AI-driven automation, where companies replace routine tasks-from software development to customer service-to reduce operational costs and improve margins. Major Indian IT services firms, including TCS and Infosys, are accelerating AI project wins but maintaining cautious hiring, emphasizing specialized roles in AI implementation while downsizing legacy support functions. Investor demands for rapid return on AI investments further compel CEOs to favor profit metrics over social ones.
Historically, IT revolutions created new opportunities after initial disruptions. However, Nayar believes the AI era lacks such a trajectory due to simultaneous deployment across sectors, limiting transitional roles. Reskilling at the required pace is challenging, risking structural unemployment in tech. "The speed of change is exponential," he explained. "If companies cannot reskill their workforce fast enough, job losses will outpace creation, leading to a tech sector crisis." Studies indicate AI could displace up to 20-25% of IT jobs by 2027 without adequate measures.
This profit-centric approach is reinforced by competitive dynamics. In a global market where AI expertise is in high demand, IT firms race to capture premium pricing for AI-driven services while celebrating revenue growth from AI projects. Workforce implications are often discussed peripherally. For instance, TCS reported a 30% increase in AI-related contract wins but flat hiring in core IT services, while Infosys expanded AI engineering teams amid layoffs in legacy IT support-a pattern signaling leaner, automated operations.
The ramifications extend beyond the IT industry. Nayar warned that a concentrated focus on profit in AI deployment could deepen economic inequalities and trigger social backlash. He urged collaboration between businesses, governments, and educational institutions for reskilling programs and AI-focused job creation. Proposing ESG frameworks and tax incentives for companies demonstrating measurable AI-related job growth, he stated: "Social responsibility cannot be an afterthought." Without intervention, AI adoption may widen disparities and fuel unrest.
The AI Impact Summit, organized by CII and IIT Mumbai, convened global experts to debate these challenges. While other speakers highlighted AI’s potential for job growth in data science and machine learning, Nayar’s assessment provided a sobering counterpoint. His remarks align with World Economic Forum projections that AI could displace 85 million jobs globally by 2025 while creating 97 million new ones-a net positive only if transitions are managed effectively.
Nayar urged IT firms to adopt balanced scorecards tracking employment generation alongside revenue growth. He noted emerging ESG trends where investors increasingly value companies with strong social impact, suggesting accountability tools could enforce inclusive growth. However, he acknowledged change requires regulatory pressure, as market forces currently reward short-term profitability over long-term societal benefits, risking a deeper employment crisis if unaddressed.
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