GenAI’s Impact On Job Loss Now Visible

It is likely that GenAI has an impact on the headcount now. Companies know that GenAI is going to make many job roles redundant and that is the reason that they are now being strict on performance reviews -- Pareekh Jain, Founder, Pareekh Consulting, tells Bizz Buzz

Bengaluru: Indian IT industry has begun to witness the impact of generative AI on overall headcount of domestic IT firms as employee addition failed to match the revenue growth during the third quarter of current financial year.

According to experts and management of several companies, GenAI is making many job roles redundant, which has led to fall in headcount of several Indian IT firms during October-December period. Though AI is also creating demand for new roles, they are enough to compensate for the loss yet.

Job roles like content writers in the marketing department, L1 roles operations, tele caller in the BPM industry and many others are getting automated through applications like ChatGPT across the industry. This is the reason that despite sound growth in Q3 revenue of top IT firms, headcount growth has not kept pace on proportionate basis.

“It is likely that GenAI has an impact on the headcount now. Companies know that GenAI is going to make many job roles redundant and that is the reason that they are now being strict on performance reviews,” Pareekh Jain, an IT outsourcing advisor & Founder of Pareekh Consulting, told Bizz Buzz.

Apart from GenAI’s impact, the employee utilisation has gone up for most companies. “If you look at it now because of AI, GenAI-led automation, we are able to do work with a lesser number of people. Secondly, utilization number continues to improve,” CEO of L&T Technology Services, Amit Chadha told Bizz Buzz in an interaction.

Bucking the trend, several Indian IT players- both large and mid-tier firms- have posted sound revenue growth with improvement in their operating margins during Q3 of FY25. However, employee addition has not matched their revenue growth, giving a mixed signal to the market. This is in contrast to the earlier trend of two quarters when most firms added headcount after a year of lull seen during FY24.

After two quarters of headcount addition, TCS saw its total headcount declining by of 5,370employees to 607,354 in October-December period of FY25. Similarly, employee count of Wipro stood at 232,732, a fall of 1,157staffers.

Meanwhile, Infosys’ total employee strength increased to 323,379, up 716 over the same period last year. HCLTech’s total employee count of the Noida-headquartered company rose by 2,134to 220,755.

However, management of these companies indicated that employee addition may not increase proportionate to revenue growth in the future on the back of higher productivity coming from AI, GenAI and other measures.

Despite such tepid employee addition numbers in general, the intent of domestic IT firms to hire higher number of freshers remains. While TCS said it is likely to hire around 40,000 freshers in the next financial year, Infosys & Wipro are likely to hire around 10,000 freshers each in FY26.