What Wipro’s 20,000-Employee AI Claim Means for Indian Jobs

Wipro recently announced that the company’s new AI push created productivity that’s equivalent to about 20,000 employees. This means it’s AI initiatives cater to about 8% of its workforce. Now the company was careful to state that this does not mean it laid off or replaced 20,000 people and instead, stated that the AI capacity has been redeployed to other tasks. There is growing anxiety of job losses due to AI, with one S&P report saying that about 68% Indians fear that AI can replace them. 

The burning question here is that if a company can produce the equivalent output of thousands of employees without actually adding thousands of people, what happens to hiring as these systems become more capable?

A few months back, TCS stated that more than 270,000 of its employees have AI/ML skills with annual AI revenue crossing $2.3 billion. Infosys said it is working on more than 4600 AI projects and has over 200 enterprise agents working with various clients. Three of India’s major IT companies are increasingly talking about AI agents taking over parts of work that employees do, but with humans overseeing them. India’s IT-services industry basically depends on the model of companies hiring more as business grows. But with AI, this can potentially change as a company can have more productivity without increasing workforce.

Technology is also moving in the same direction, as OpenAI’s latest Astra model can do a wide range of tasks including research, interacting with systems, testing software, and can do it 47% faster than previous models. Software is becoming more capable of performing parts of the work. But are fears surrounding AI and jobs real or a hype?

There’s an interesting technological analogy that can be given to this. In the beginning of the 20th century, automobiles started replacing horses. For almost 20 years since 1900, horses and automobiles existed together, but once cars started taking over, not just horses but the entire industry around them (carriage makers, saddle makers, and other horse accessories) started vanishing. Does this mean there were job losses? No.

In fact, what happened in the transportation sector was drastic, it grew enormously. It created a market for factories, mechanics, petrol stations, roads, insurance, tires, and what not. Automobiles didn’t just replace an existing means of transport. It made a vast amount of transportation economically cheaper and possible. That is one reason the horse-to-car transition is often used as an example of technological change creating new economic activity rather than simply destroying it.

However, there’s also another argument here. A carriage driver or a leather-worker didn’t automatically become a mechanic. The skill he had spent decades learning suddenly became less valuable even as the economy in general was expanding. But, someone who learned how to be a car driver or a tire mechanic or a brake-engineer benefitted.

The same is with AI. Saying that AI will create new jobs may be true, but it doesn’t tell us whether those jobs will arrive quickly enough, or whether they will be accessible to the people whose existing work is being automated.

That is pertinent to India’s IT industry, where the concern may not initially show up as mass layoffs. It could show up in the number of people companies decide not to hire. If an experienced engineer working with AI can handle work that once required several junior employees, companies may still grow, but the number of entry-level positions created along the way could fall. For a sector that has provided employment to generations of Indian graduates, that could be a much bigger change than a few rounds of layoffs.

At the same time, it would be premature to conclude that AI will simply shrink the workforce. If software development, research, analysis and other forms of knowledge work become substantially cheaper, companies may simply consume much more of them. Tasks that were previously too expensive to undertake could become viable. New businesses and industries could emerge around capabilities that are difficult to imagine today, just as the automobile created businesses that had little equivalent in the horse-powered economy.

That leaves the real question somewhat less dramatic than “Will AI take your job?” and considerably harder to answer. Some jobs will disappear, some will change and others will emerge. The more consequential issue is whether the new demand created by cheaper, more capable AI will be large enough to compensate for the work that becomes unnecessary, and whether workers can make the transition quickly enough. 

It boils down to individual upskilling and adapting to the technology instead of succumbing to fear of job losses.

Tags Wipro