“AI not a threat, but a force multiplier”
Global and domestic IT majors have shed employees due to the adoption of AI. Why is the middle management more prone to retrenchment?
The cost structure of the Indian IT industry is based on carefully managing the workforce pyramid, where for each 8-10 engineers, there is one middle manager, with a very small top management layer. As long as the company was growing annually at 20% or higher, the pyramid was naturally maintained through fresh hires at the bottom and some attrition from the middle. With the growth rate now reducing to single digits, the middle management becomes bloated unless there is retrenchment.
In the AI-driven future we could see a diamond shaped organisation with the middle containing mostly specialists.
How can companies cushion the adverse impact of AI on such employees?
Companies will need to re-orient and re-skill their employees to manage the impact. To navigate this, companies must decouple professional status from headcount. Traditionally, a manager’s value was tied to the size of his team. In the AI era, employees will be valued based on their ability to harness the power of AI tools to carry out their tasks. Generalist managers should move into roles of coaches who possess technical depth to audit AI-generated outputs. Employees should be judged based on their ability to harness AI to compress project timelines and increase accuracy.
How can companies use AI as an instrument rather than as a tool to cut costs?
While the “low-hanging fruit” of AI is cost reduction through productivity, the true competitive edge lies in velocity and co-creation. AI allows firms to move from being mere service providers to becoming strategic partners. This can be achieved by using AI to radically shorten the development lifecycle, implement AI interfaces that allow suppliers and clients to co-create custom solutions in real-time and move beyond “hiring for skills” to “hiring for adaptability,” ensuring the workforce can pivot as AI capabilities evolve.
How can employees maximise the potential of AI in their careers?
Employees should view AI not as a threat, but as a force multiplier. I recommend adopting a “continuous experimentation” mindset: use AI to automate the mundane aspects of your role to free up time for high-level strategy and creative problem-solving.
