AI creating more jobs than destroying them in India
What's the story
A recent report by Nomura has revealed that artificial intelligence (AI) is creating more jobs than it is destroying in India. The country, with its massive workforce and status as the world's back-office and IT services hub, is witnessing a net positive impact from AI-related employment. However, the report also highlights a major disruption at the entry-level of the job market.
Job market shift
Experienced professionals in demand, entry-level jobs declining
The Nomura report examined 69 company announcements across Asia from 2022 to August 2026.
It found that while around 131,000 AI-related jobs were created, 61,000 jobs were lost.
This K-shaped split in the labor market shows a decline in demand for entry-level workers, even as experienced professionals are in high demand.
Hiring trends
IT companies reducing entry-level hiring
A survey by the Indian Council for Research on International Economic Relations found that 55% of IT companies have reduced entry-level hiring.
In contrast, only 14% have decreased senior-level hiring.
This trend is similar to South Korea, where youth employment has fallen in AI-exposed industries while those in their 50s saw an increase.
Adjustment strategies
Companies adjusting to AI by hiring fewer new employees
Instead of firing existing employees, companies are adjusting to AI by hiring fewer new ones.
In India, staffing firm Xpheno estimates that net hiring in the IT sector has fallen from around 600,000 in FY22 to 140,000 in FY26.
This adjustment is largely through reduced campus recruitment and slower hiring rather than mass layoffs.
Layoff distribution
Financial services and technology sectors most affected by layoffs
The AI-related layoffs recorded by Nomura are heavily concentrated in the financial services and technology sectors.
Financial services account for around 58% of documented AI-related layoffs while the technology sector accounts for another 30%.
The most vulnerable jobs so far are largely routine or lower-skilled roles such as banking back-office functions, customer service roles handled by chatbots, and junior technology jobs.
Job vulnerability
New jobs largely in data annotation and IT services
More than 90% of total AI-related job creation identified by Nomura was in technology, with less than 10% spread across other sectors.
In India, new jobs have largely been in data annotation, linguistics and AI-related IT services.
However, traditional entry-level and back-office jobs are becoming increasingly vulnerable as AI systems improve at performing these tasks.