India's technology outsourcing sector is facing challenges brought about by artificial intelligence (AI), as the rise of AI could lead to significant job losses, affecting an industry that contributes 8% to the Indian economy. In the past year, the industry added only 60,000 jobs, marking a ten-year low, while the total number of employees in three major tech companies decreased by over 60,000 during the same period. The labor intensity of the industry is decreasing, with the number of employees required to generate $1 million in annual revenue dropping from 27 to 21, indicating that AI may exacerbate this trend. Indian outsourcing companies are actively responding by training employees to adapt to the future demand for advanced skills.
