In the Age of AI, Will there be Jobs?

As Artificial Intelligence slowly becomes an inescapable reality of the labour market and the larger economy, the question to be posed is how the resulting technological change disrupts the existing (dis)equilibrium of capital-labour relations. Such a framing allows us to move beyond the restrictive binary of labour displacement versus augmentation, which often abstracts AI-led disruptions from their specific political economy contexts.

The AI Race

For instance, while deployed indiscriminately across sectors, AI’s impact on labour has been particularly pronounced in the IT/ITeS sector, informed by the political economy context of its development in India. Since its inception, India has only played the role of a ‘provider of cheap yet qualified labour’ in the global software value chain, with only minimal upgrades over the years. Secondly, the IT sector workforce has been historically drawn from aspirational middle-class groups and has been characterised as apolitical, pliant, and individuated, rendering it particularly susceptible to the diktats of home-grown corporate capital. The convergence of these conditions has severely weakened workers' bargaining power, making Indian IT sector workers easy and immediate targets of AI-led labour restructuring.

Corporations at the technological frontier have been consolidating their control over AI development and emerging as global monopolies, with the result that they increasingly dictate the trajectory of technological change at the core, and consequently, at the periphery. Thus, the AI race is as much about strengthening political and geopolitical power as it is about securing new avenues of capital accumulation. Companies further down the value chain are compelled to adopt AI technologies to remain competitive, thus resulting in an "AI race" in which adaptation becomes a condition for survival rather than a strategic choice. The burden of this competitive pressure, however, falls disproportionately on workers. Although these firms have been built through the labour of their workforce, workers increasingly bear the costs of AI-driven restructuring through job displacement, labour intensification, deskilling, and heightened employment insecurity. Thus, monopoly power at the apex of the AI value chain flows through downstream industries, transforming inter-firm competition into a process in which workers become the principal casualties of capital's race for technological advantage.

  AI-led Labour Restructuring 

The tech world has been abuzz with the AI versus labour debate for the last several months, as giants in the industry continue to make record gains on the one hand, while laying off workers on the other. The AI revolution in the IT sector has impacted workers at different stages of their careers in varying, yet equally devastating, ways. Those at the later stages of their careers are increasingly compelled to continuously upskill merely to remain employable in an AI-driven labour market, exposing the job insecurity that underlies an outwardly flashy industry. The IT sector has long exhibited a preference for more adaptable, and often less costly, workers, frequently sidelining experienced employees as their skills are deemed obsolete. The diffusion of AI, though still largely anticipatory in nature, has provided employers with the perfect justification to accelerate this tendency under the guise of technological transformation.

For entry-level workers, an aspirational career ladder that once promised social mobility to a vast section of the educated workforce has suddenly begun to disappear, with recruitments slowing and employers increasingly favouring temporary and contractual positions.

The flattening of middle management has likewise become a key component of the AI-led restructuring agenda of major business firms. Supervisory roles continue to be reserved for humans, for the time being, albeit reconfigured to suit a new paradigm of AI-human collaboration. Even here, however, humans simply serve as placeholders until the technology catches up.

Workers are not only expected to shoulder the burden of relentless upskilling and productivity gains but are also made responsible for downsizing teams and training the very AI systems through what is known as ego-centric data development that will ultimately replace them. In doing so, they are compelled to participate in their own redundancy, living under the constant threat of dismissal to protect profits. Consequently, a sector already characterised by intense interpersonal competition and a highly individuated workforce has come to be even more competitive, as workers are increasingly required to demonstrate their value not only against one another but also against AI systems.

More recent reports of re-hiring emerging from different quarters must also be viewed in this context, where labour has been relegated to a position of powerless flexibility, expected to continually mould itself to the profit-making imperatives of capital. Companies have been shifting to just-in-time hiring, contractual employment and outsourcing to tide over the AI deflation.

From Job Loss to Job Degradation

A widely held view is that AI-led layoffs are merely a transitory phenomenon, and that new jobs accommodating AI will soon emerge as workers reskill themselves in that direction. But capital is mobile, with little reason to remain in the same geographical location once AI proves more profitable than the comparative advantage that location once offered. Reskilling, after all, does not determine where capital chooses to locate itself. In the vacuum created by this transition, the jobs that remain are likely to be characterised by weaker bargaining power, greater precarity, and an overall degradation of work, particularly for a distinctly non-unionised workforce. There is, therefore, greater reason to believe that this shift is structural rather than transitory, at least in the context of developing economies.

Therefore, to finally answer the question we set out with: What will the new configuration of capital-labour relations look like as AI takes over? The more immediate consequence is not necessarily job loss but job degradation, as power further skews in favour of capital. Workers experience a drastic erosion of their bargaining power. Once productivity is measured against the speed, consistency, and cost of AI systems, the benchmark itself shifts beyond human capabilities. Workers are consequently compelled to work harder, accept lower wages, or both, simply to remain in the workforce. Therefore, just to stay in the race, India will have to downgrade its historical position in the software value chain from a supplier of ‘cheap labour' to a supplier of ‘cheaper labour’, with the possibility of value chain upgradation postponed indefinitely.