AI can disrupt both cognitive and skilled jobs, but fear still outweighs facts: CEA Nageswaran

“AI can be more disruptive because it is coming for both cognitive and skill-based jobs,” Nageswaran told ANI, pointing out that the technology is no longer limited to automating routine factory or clerical work.

AI systems can now write code, analyse documents, generate content, process financial information and assist in medical diagnosis. This has widened concerns from factory workers and data-entry operators to software developers, researchers, analysts and other white-collar professionals.

However, the CEA cautioned that the debate is still being driven by more fear than reliable information.

“Right now, there is far too much fear and far too little information about the AI threat,” he said.

Companies are now citing AI while cutting jobs

The fear is not entirely theoretical.

According to global outplacement firm Challenger, Gray & Christmas, AI was cited in 87,714 announced job cuts in the US during the first five months of 2026. This accounted for around 22% of all planned layoffs during the period and was already higher than the 54,836 cuts attributed to AI in all of 2025.

In May alone, companies linked 38,579 planned job cuts to AI — around 40% of all reductions announced during the month. It was the third consecutive month in which AI emerged as the most frequently cited reason for job cuts.

Several companies have openly connected workforce reductions with their adoption of AI.

Payments company Block announced more than 4,000 job cuts in February, reducing nearly half its workforce. Chief executive Jack Dorsey said advances in AI had changed how companies could be organised and operated.

Snap subsequently announced around 1,000 job cuts, equivalent to nearly 16% of its workforce. The company said AI was enabling smaller teams to undertake work that earlier required larger groups of employees.

Meta has also reduced its global workforce by around 10% while moving thousands of employees into AI-related roles as part of a wider restructuring.

However, these announcements do not necessarily mean that every worker was directly replaced by an AI system. In many cases, companies are also cutting costs, removing management layers and redirecting salaries and operating budgets towards expensive AI infrastructure.

Stanford data shows pressure on younger workers

The early impact appears to be concentrated in hiring pipelines and entry-level jobs rather than across the entire labour market.

Stanford University’s 2026 AI Index found that employment among software developers aged between 22 and 25 had fallen by nearly 20% from 2024 levels.

The decline is significant because junior developers traditionally perform tasks such as basic coding, testing, documentation and debugging — work that can increasingly be accelerated through AI tools.

Stanford also found that around one-third of surveyed organisations expect AI to reduce their workforce over the coming year. 

The largest expected reductions were in software engineering, service operations and supply-chain functions. Yet the report did not find evidence of large-scale job destruction across the broader economy. Almost half of the organisations surveyed expected AI to cause little or no change in their overall workforce.

The data indicates that the first visible impact may not be mass unemployment, but fewer entry-level openings, smaller teams and changing responsibilities within existing jobs.

LinkedIn sees new roles emerging

LinkedIn data shows that at least 1.3 million AI-related job opportunities have been created globally over the past two years.

These include AI engineers, data annotators and forward-deployed engineers who work directly with companies to introduce AI into their operations.

India is already participating in this shift.

LinkedIn’s list of the fastest-growing jobs in India for 2026 placed Prompt Engineer at the top, followed by AI Engineer. Manager of Artificial Intelligence was ranked fourth.

The number of Indian companies employing a Head of AI also increased modestly in recent years as per LinkedIn data indicating that businesses are moving from experimenting with AI tools to building dedicated AI teams.

Earlier analysis by Financial Express also showed that India recorded a 33.4% year-on-year increase in AI hiring in 2024, according to the Stanford AI Index 2025. This was higher than the rise recorded in Brazil and Saudi Arabia.

What Infosys and TCS are saying

The transition is particularly important for India’s IT services industry, which has traditionally depended on recruiting large numbers of engineers and placing them within a pyramid-shaped workforce.

Tata Consultancy Services announced more than 12,000 job cuts in July 2025, primarily affecting middle- and senior-level employees. Its net workforce subsequently declined by more than 23,000 during the financial year ended March 2026.

TCS did not describe every reduction as the direct replacement of a worker by AI. The company linked the restructuring to changing business models, skill requirements, automation and a difficult demand environment.

However, TCS chairman N Chandrasekaran has acknowledged that AI will reduce the scale of traditional recruitment. He recently said the company could eventually have as many AI agents as human employees, with the two working together.

TCS has said it does not currently plan another round of layoffs, but will recruit fewer employees than it did during the previous two decades.

Infosys has taken a different position.

Chief executive Salil Parekh has said the company did not undertake layoffs during the past year and does not expect such reductions in the near term. Infosys also plans to hire around 20,000 fresh graduates during 2026.

Parekh has argued that AI is expanding the scope of work available to the company, although it will change the traditional workforce pyramid and the skills expected from employees.

At Infosys’ AI Investor Day earlier this year, chairman Nandan Nilekani cited estimates suggesting that around 90 million existing jobs could be at risk while as many as 170 million new roles may emerge.

As per Nandan Nilekani coming years will likely see rising demand for specialised like AI engineers, forensic analysts, data annotators, forward-deployed engineers and specialists capable of designing AI-led workflows.

Replacement or productivity tool?

Nageswaran said the eventual impact would depend on whether AI is used to replace workers or help them become more productive.

AI is already assisting doctors, teachers and radiologists by processing information and identifying patterns more quickly. In such cases, the technology does not necessarily eliminate the professional but allows them to handle more work or make better decisions.

Stanford’s AI Index found productivity improvements of around 14-15% in customer-support work, 26% in software development and as much as 50% in some marketing functions.

However, productivity gains can still reduce employment when companies use the same number of workers to produce more output or decide that smaller teams can meet existing demand.

The outcome will therefore vary across industries and occupations.

The skilling challenge

For India, the disruption carries greater risks because millions of people enter the workforce every year.

The Economic Survey has estimated that the country needs to create around eight million jobs annually. At the same time, only a small proportion of Indian workers have received formal skill training.

Nageswaran said education and skilling systems must evolve alongside AI adoption. Workers will need a combination of AI literacy, domain knowledge, communication abilities and trade skills that are difficult to automate completely.

The central question is not merely whether AI creates more jobs than it removes. It is whether workers displaced from existing roles can gain the skills and access required to move into the new ones.

AI may not have produced economy-wide mass unemployment yet. But it is already changing who companies recruit, what junior employees are expected to do and how many people businesses believe they need.

As per Nageswaran, managing that transition may prove as important as developing and adopting the technology itself.