22/07/2016 6:13 PM IST | Updated 24/07/2016 9:20 AM IST

Are Bots, Artificial Intelligence Eating Up IT Jobs Faster Than Expected?

Ok, it may not be quite like "The Terminator" but who knows?

Mike Agliolo

No need to panic, but automation and artificial intelligence may already be playing a role in reducing IT hiring in India.

According to Nasscom, an Indian IT industry association, fresh hiring in the current financial year is expected to decline compared to last year as IT companies face stiff margins, and move more jobs to automation. Campus hiring may fall for the first time since 2009.

"Hiring activity in the year before last was 2.20 lakh (new jobs were created in IT sector). Last year there were about two lakh additions. This financial year, we are expecting it to be on the lower side of that," Nasscom President R Chandrashekhar said.

Over the long-term, Nasscom expects 5 per cent to 10 per cent of IT jobs will be lost to automation in the next ten years. That means about 60 per cent to 70 per cent of existing IT workforce will need to get re-trained in new skills where jobs are expected to remain. These areas include biotech, nano-tech, smart technologies, and other technology jobs involving advanced analytical skills.

"[IT companies] are adopting higher productivity by reducing the strength and focusing on automation," said Chandrashekhar. "For a country like India, automation works differently as cost-effectiveness on automation is different because our economic levels are different."

Artificial intelligence platforms can automate many repetitive tasks such as data entry and can potentially be deployed for jobs that require even "higher cognition," triggering concerns about the future of many IT jobs.

India's IT services and Business Process Management (BPM) sectors employ about 3.7 million people. And Indian IT services companies have been under pressure to stay competitive and differentiate their offerings through automation initiatives such as the use of artificial intelligence platforms.

Earlier this year, Wipro said its AI platform "Holmes" will free up 3,000 engineers from "mundane" software maintenance jobs," a step expected to save the company about $46.5 million as it tries to boost profitability, according to media reports. Tata Consultancy Services uses an AI platform called 'Ignio,' while Infosys uses 'Mana'.

Indian IT majors have also recently reported lacklustre results, which means the pressure to automate and improve margins is likely to further increase. Infosys recently slashed its full-year revenue outlook in what its CEO Vishal Sikka called "disappointing" quarterly results in an e-mail to employees; Wipro's June quarter profit fell 6.7 per cent to Rs ,059 crores. While Tata Consultancy Services (TCS) posted results that just matched analyst expectations – its dollar-denominated revenues grew 3.7 per cent in the latest quarter to $4,362 million from the previous quarter.

Even outside India, artificial intelligence and automation is creating some anxiety. One report states that nearly half of American jobs will be automated in the next two decades.

However, there is plenty of commentary out there that stresses that "Frankenstein" and "Terminator" like scenarios are far-fetched, and that in the short-term the new technology will give rise to new jobs.

With PTI inputs