AI Jobs in India Outpace Layoffs 2.6 to 1, But Skill Gap Remains Major Challenge

Artificial intelligence (AI) is reshaping India's employment landscape, but not in the way many had feared. While automation is replacing certain roles, companies are simultaneously hiring significantly more professionals for AI-related positions. According to a recent Nomura report, India recorded 83,100 AI-related hires against 31,921 AI-linked layoffs and attrition, indicating that nearly 2.6 new AI jobs are being created for every role affected by automation.

The findings suggest that AI is generating fresh employment opportunities, but they also reveal a growing challenge: the workers losing jobs often lack the skills required for the new positions being created.

AI Hiring Outpaces Job Losses in India

The Nomura report, first accessed by Bloomberg News, analysed 69 employment-related cases across Asia between 2022 and August 2026. India emerged as the country with the highest number of both AI-driven hiring and AI-related job losses.

The report found that AI adoption is reducing demand for routine, repetitive tasks while increasing recruitment for professionals capable of building, deploying and managing AI systems.

This trend has resulted in a net positive employment impact, offering reassurance amid growing concerns about AI replacing human workers.

Why India Is At The Centre Of AI's Employment Shift

Nomura economists described India as the "ground zero" for understanding AI's impact on employment because of the country's massive workforce and its global leadership in IT services and business process outsourcing (BPO).

For years, India's technology sector has relied heavily on large teams handling customer support, software testing, data processing and other operational functions. AI is now automating many of these repetitive tasks, allowing companies to improve efficiency while creating demand for AI specialists, machine learning engineers and automation experts.

As businesses increasingly integrate AI into their operations, the composition of India's workforce is beginning to change.

The Catch: New Jobs Need Different Skills

Despite the positive hiring numbers, the report highlights an important concern.

The jobs created by AI are rarely suitable replacements for the jobs being eliminated. Employees who previously worked in customer service, technical support or data processing often cannot directly transition into AI engineering or advanced technology roles without significant reskilling.

These newer positions typically require expertise in artificial intelligence, programming, machine learning, data science and cloud technologies.

As a result, headline hiring figures may hide the difficulties faced by workers whose existing skills are becoming obsolete.

Entry-Level Jobs Could Become Harder To Find

One of the biggest concerns raised in the report is the impact on fresh graduates.

Traditionally, entry-level positions have served as a stepping stone for young professionals entering the workforce. These roles allowed employees to gain industry experience before progressing into specialised careers.

However, AI is reducing demand for many basic operational roles. Companies are increasingly seeking candidates who already possess AI-related skills rather than hiring large numbers of graduates for training.

Nomura describes this emerging trend as a two-tier labour market, where demand continues to grow for experienced professionals with AI expertise, while opportunities for traditional entry-level roles decline.

AI Employment Trends Across Asia

India's experience reflects a broader regional trend.

Across Asia, Nomura identified:

• 1,30,758 AI-related hires
• 60,654 AI-linked job losses
• More than 90% of new hiring occurred in the technology sector
• Nearly 60% of AI-related job losses were concentrated in financial services

Countries with large outsourcing industries, including India, China and the Philippines, are witnessing similar patterns as automation transforms traditional business operations.

AI Could Boost Productivity Instead Of Replacing Workers

While automation continues to reshape industries, the report suggests AI may ultimately strengthen India's economy rather than weaken it.

Greater adoption of AI could improve employee productivity, help companies secure more global projects and create demand for higher-value technology roles. Existing jobs may evolve rather than disappear entirely, with professionals increasingly working alongside AI tools instead of being replaced by them.

However, this transition will depend heavily on reskilling initiatives that help workers move into emerging AI-driven careers.

Outlook

The latest data indicates that AI is currently creating more employment opportunities in India than it is eliminating. Nevertheless, the real challenge lies in ensuring that workers displaced by automation have access to the education and training required to benefit from these new opportunities.

As AI adoption accelerates across industries, India's future workforce will likely depend less on routine operational skills and more on technological expertise, adaptability and continuous learning.