AI boosts productivity, not triggering mass layoffs: ICRIER-OpenAI report

A new study by the Indian Council for Research on International Economic Relations (ICRIER) and OpenAI has sought to downplay fears over large-scale labour market disruptions from Artificial Intelligence, saying generative AI is currently not causing mass layoffs but is reshaping how work is organised, raising productivity and transforming roles.

The conclusions draw from survey of 650 IT firms across 10 cities (conducted between November 2025 and January 2026), analysing shifts in hiring patterns, occupational demand, productivity outcomes, and workforce skilling.

According to the study conducted by ICRIER, and supported by OpenAI, evidence from firms suggests AI is amplifying output and elevating skilled experts, and not triggering mass lay-offs.

 

Titled 'AI and Jobs: This time is no different', the study found that generative AI is currently not causing mass job displacement but is reshaping how work is organised, raising productivity and transforming roles.

Ronnie Chatterji, Chief Economist at OpenAI said, "We are seeing a shift in how work is organised, where AI appears to be complementing human talent. This data offers a window into the transition underway in India."  Chatterji added, "Focus now should be on the practical steps needed to help workers align their skills with the advancing capabilities of AI. Currently, only 4 per cent of firms have trained more than half their workforce in AI, presenting a huge opportunity for growth."  Firms report a modest moderation in hiring, primarily concentrated at the entry level, alongside stability at mid and senior levels, according to the report.

Researchers note that this moderation aligns with broader post-pandemic trends in the IT industry and cannot be attributed to AI adoption alone.

"Roles commonly perceived as most exposed to AI, such as software developers and database administrators, are also among those experiencing the strongest growth in demand, indicating that gen AI is primarily functioning as a productivity-enhancing complement to technical and analytical work, rather than a substitute, the study claimed.

Shekhar Aiyar, Director and Chief Executive, ICRIER noted that while "everyone has opinions on this matter", the ICRIER-OpenAI study actually "brings evidence to the table".

"The authors have complemented survey findings with in-depth interviews with Indian IT industry leaders to better understand the true impact of generative AI. The results should reassure Indian policymakers without inducing complacency," Aiyar said, but added that while India's IT sector appears to be managing AI adoption relatively well, many firms remain insufficiently prepared for what lies ahead.