Amid concerns about jobs and relevance, a key industry leader says the India IT sector faces a “painful” transition due to AI, but emphasizes the industry’s resilience and need to reinvent.
Illustration: Dado Ruvic/Reuters
Key Points
- The India IT sector is undergoing a “painful” transition due to the rise of AI and automation.
- Despite challenges, the IT sector’s ability to manage complex enterprise technology and domain understanding will ensure its continued relevance.
- Reskilling and upskilling are crucial for IT professionals to leverage AI tools and deliver higher efficiencies.
- While AI can automate coding tasks, specialized skills and innovative work will remain in high demand.
- SaaS companies may face challenges as they struggle to maintain high prices amid evolving technology landscape.
Amid widespread concerns on jobs and the relevance of the nearly $300 billion India IT services sector, a key industry leader on Tuesday said the current transition will be “painful” because it involves humans.
HCL Tech’s managing director and chief executive C Vijayakumar, however, said this is not the time to write an obituary for the industry, underlining that the ability to manage complex enterprise technology architectures and domain understanding will ensure its relevance.
Recounting how the industry navigated changes like the opportunities after the Y2K in the past, Vijayakumar said the industry will have to reinvent, and added that investor concerns on IT stocks are “overblown”.
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“I would say this transition (brought by AI) is different from the other transitions. Its going to be painful because it really involves people,” the CEO of the third largest Indian IT services company said while speaking at industry lobby grouping Nasscom’s NTLF event here.
It can be recalled that a lot of tech companies globally, and also some in India have opted to sack people as AI models automate work and do it a lot more efficiently.
Adapting to Complexity and Reimagining the IT Sector
Vijayakumar said the IT services companies deal with a lot of complexities and the context in which they operate will make them relevant.
This is the biggest inflection point for the Indian IT sector and an opportunity to completely re-imagine the sector over the next 5-10 years, he said.
Stressing that the industry has a “promising road ahead”, Vijayakumar pointed out that while Anthropic’s Claude will be very good at coding — just 30 per cent of software development involves coding.
Demand for specilaised skills will grow in the future, he said, adding that people will have to focus on doing innovative and higher order work.
The Need for Reskilling and Efficiency
Later, he told reporters that there is a need for reskilling and ensuring how the same person can deliver up to four times efficiencies using AI tools.
About strides announced by Anthropic in streamlining COBOL Code overnight, Vijayakumar hinted that COBOL conversion is one part of the wider modernisation work of the 50-year-old mainframe, hinting that there will be opportunities.
He said software as a service (SaaS) companies, who reported high growths in the last few years by charging more from clients, will be the ones who stand to face some challenges going forward as they are not able to realise the same prices.
Vijayakumar also suggested that the hyperscalers who invest very high sums of money in setting up infrastructure, may find it challenging going ahead as revenues they book will not be high enough to justify the investments.
