India approaching AI with caution as IT boom comes under threat 
The rise of automation in India is regarded as a double-edged sword, with companies benefitting from technological advances and reduced costs of artificial intelligence (AI), but human workers paying the price through unemployment, according to Samanth Subramanian. Writing for the MIT Technology Review, he said the country's two-decade old IT boom could be ended by chatbots and algorithms. While only about 25% of easily automated tasks are being carried out solely by machines in India, according to Forrester Research, Subramanian said Indian businesses are still "enthusiastically dabbling" in the sector, spelling potential doom for the IT industry.

When his employment was terminated, Kumar was earning close to $17,000 annually, a nice middle-class salary in India. Around the same time, Tech Mahindra announced profits for the previous financial year of $419 million, on revenue of $4.35 billion. (Tech Mahindra did not respond to a request for comment for this story.) IT services and related offerings in India record annual revenue of $154 billion and employ nearly four million people. The sector’s vigor has relied upon its ability to shave costs lower and lower—upon its ability to arbitrage the cheaply bought skills of workers like Sunil Kumar.

Bangalore is filled with IT professionals and engineers who resemble him. His curly hair is thin on top and gray at the temples; when we spoke he was wearing a faded checked Tommy Hilfiger shirt, a backpack, and a look of subdued anxiety. He grew up in a village a few hundred miles from Bangalore, where his father wove silk saris on a handloom. In 1995, when he was 15, he moved to Bangalore to study for a diploma in mechanical engineering; it was a step below a university degree, which he would gain later through a correspondence course.

Until he joined Tech Mahindra, in the summer of 2008, Kumar worked as a draftsman at an aerospace firm. The new job opened his life up the way the IT industry did for so many Indians, offering a chance to vault from a blue-collar background to a white-collar future. He got married, and the couple had a son; he took out a loan of $47,000 to buy a house, so that his parents and two brothers, who followed him to Bangalore, could stay with him. “I live a middle-class life,” he says. “I don’t want to showcase to people that I’m doing an IT job. Branded shirts, shoes—I don’t want them.”

The size and prestige of India’s IT industry are reflected in the design of Infosys campuses in Mysore (above) and Bangalore (below).

INDIAPICTURES/UIG VIA GETTY IMAGES

When Kumar lost his job, he became part of a wave of layoffs washing through the Indian IT industry—a term that includes, in its vastness, call centers, engineering services, business process outsourcing firms, and infrastructure management and software companies. The recent layoffs are part of the industry’s most significant period of churn since it began to boom two decades ago. Companies don’t necessarily attribute these layoffs directly to automation, but at the same time, they constantly identify automation as the spark for huge changes in the industry. Bots, machine learning, and algorithms that robotically execute processes are rendering old skills redundant, recasting the idea of work and making a smaller labor force seem likely.

An analysis by the business newspaper Mint reported that the top seven IT firms in India will lay off at least 56,000 employees this year. After its annual general meeting this summer, the $10 billion behemoth Infosys announced that 11,000 of its 200,000 employees had been “released” from repetitive tasks by automation and redeployed elsewhere within the company, the burden of their previous work now borne by algorithms. HfS Research, which studies the IT industry, predicted last year that automation will result in a net loss of 480,000 jobs in India by 2021. “If we sit still, there is absolutely no doubt that our jobs are going to be wiped out by AI,” Vishal Sikka said in March, when he was still the CEO of Infosys. (Sikka resigned in August.) “Sixty to 70 percent over the next 10 years—or maybe less than 10 years—of the jobs that we do today are going to be replaced by AI ... unless we continue to evolve ourselves.”

Automation could hit India particularly hard because much of its high-tech economy involves ­relatively routine work that is prime for computers to take over.

The fear that AI is pulverizing jobs is not unique to India, but automation could hit this country particularly hard because so much of its high-tech economy involves relatively routine work that is prime for computers to take over. In some cases, Indian IT services companies will automate the work themselves. In other cases, companies in the West will do it, so they no longer have to farm work out to humans in India.

Sunil Kumar wasn’t told, in any detail, why he was being let go; he insists that what he did at Tech Mahindra wasn’t automatable, and that he was fired as part of a drive to invigorate the bottom line. Devika Narayan, a sociologist at the University of Minnesota who is researching the subject for her doctoral thesis, thinks automation may indeed be getting too much blame for the loss of jobs like his. Companies might well be talking up automation to mask some of their own failures, or to distract from the ill effects of other factors beyond their control, she says. She points out that many IT giants are flabby and overstaffed, and that American companies are now wary, given the U.S. political climate, of sending work overseas. “The extent to which automation is being exaggerated is still unclear to me,” Narayan says. She suspects that Indian IT companies “want to leverage this automation narrative to undertake structural changes, particularly downsizing.’”