IT industry not creating enough jobs anymore, says Sridhar Vembu
What's the story
Sridhar Vembu, the founder and Chief Scientist of Zoho, has raised concerns over the impact of artificial intelligence (AI) on job creation in India's technology sector. In a post on X, he emphasized that despite the productivity gains from AI, the industry is struggling to keep up with its growing workforce. He said funds that could have been used for hiring are now being diverted toward AI infrastructure and data centers.
Job concerns
Zoho hasn't laid off employees
Vembu said, "The real issue facing our nation is how to create jobs for our massive cohort of youth in this very uncertain global landscape."
He added that while Zoho hasn't laid off employees, it also isn't creating new jobs.
The shift in spending from hiring to AI and data center costs is a major reason behind this trend.
Market saturation
Is there a need for more software?
Vembu questioned the need for more software in an already saturated global market, even if AI is helping companies develop it faster.
He said, "While AI allows us to produce more software quicker, does the over-saturated global software market need a lot more software?"
This indicates a shift in focus from quantity to quality and reliability as growth slows down due to competition.
Budget reallocation
'Which sectors can absorb workers?'
Vembu also noted that large and mid-sized enterprises are shifting a major chunk of their IT budgets toward AI.
Meanwhile, fast-growing AI companies are heavily borrowing for capital expenditure without any guarantee of profits justifying those investments.
He questioned which sectors could absorb workers if IT hiring slows down, given that automation has already impacted manufacturing jobs.
Economic challenge
Need to ensure people have enough income
Vembu acknowledged automation's potential to make advanced products more affordable by cutting production costs.
However, he stressed the bigger challenge lies in ensuring people have enough income to buy these goods.
He said, "The 'only' question is how the economy is structured so people have the income to afford those affordable goods."