Artificial intelligence (AI) is automating various processes, transforming India's technology outsourcing sector, which employs 5.4 million people. Leading companies like WNS are integrating AI into their operations. However, Keshav Murugesh, CEO of WNS, cautions that AI could quickly replace core contact center services.
The impact of AI extends beyond India, threatening global businesses. The $250 billion Indian outsourcing industry may face significant repercussions as U.S. companies might move operations back unless Indian firms embrace automation. Consulting firm Hackett Group highlights this potential shift. Vin Kumar, a tech consultant at Hackett Group, emphasized that automation is essential for retaining contracts with U.S. companies.
Nasscom data reveals that 1.4 million jobs are at risk, primarily in call centers. Murugesh emphasizes the need to ascend the value chain for survival. The trend towards reduced labor dependency is evident: a decade ago, 27 employees generated $1 million; now, only 21 are needed. Fees are increasingly tied to results rather than employee numbers. Danielle Li, a professor at MIT, remains pessimistic about India's share in the global decline in demand for staff, highlighting a broader industry challenge.
Despite adding only 60,000 jobs last year, the lowest increase in a decade, large companies like TCS, Infosys, and Wipro cut over 60,000 positions during the same period. The slowdown is attributed to post-pandemic overhiring rather than automation, though TCS CTO Harrick Vin stresses the need for advanced skills in future roles. He notes that future roles will demand critical thinking, strategic goal setting, and creative problem-solving.
Industry executives remain optimistic about AI's potential to create new business opportunities. Infosys and Tech Mahindra are pioneering AI tools and language models, anticipating more organizations will follow suit. Tech Mahindra, for instance, has developed an AI chat tool for on-site engineers and a large language model in Hindi for customer support. Balakrishna D. R., global head of AI at Infosys, mentions that their projects include AI assistance for code generation and development support.
Job seekers in Bengaluru feel the pressure, lining up at recruitment centers with growing concerns about their future. Pooja K.S., a 24-year-old applicant, voices her disheartenment over diminishing job prospects, particularly in call centers. The Wall Street Journal reports that AI is reevaluating outsourcing job structures, focusing on leveraging technology to maintain relevance. The industry faces a pivotal moment, balancing between automation advancements and the need to retain human talent. With AI continuously evolving, the future of outsourcing in India is poised for substantial shifts, demanding a dynamic adaptation strategy from businesses and workers alike.