India IT jobs slows as AI boosts coding but weakens fresh hiring: Sridhar Vembu

Sridhar Vembu, Zoho co-founder and chief scientist, has said India’s IT industry is no longer creating jobs as it used to and raised questions about whether the global market needs many more software products at a time when artificial intelligence (AI) is helping developers work faster. He said Zoho, too, has not added substantial headcount in recent years.

In a post on X, Vembu said the larger issue for India was the creation of jobs for its vast young population in a difficult global economic climate. "Sadly, the IT industry, including Zoho, have not created many jobs in recent years. We have not laid off people but we are not creating new jobs either," he wrote.

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AI spending grows, hiring weakens

Vembu said one reason for weaker hiring is the rising cost of AI and data centre infrastructure. "The money that would have gone to new employees is now going to AI and data center costs," he said. He also highlighted that server and memory prices have climbed sharply in the past few years.

He said Zoho was trying to control these costs, although several of the pressures were beyond the company’s control. His remarks come as companies across sectors increase spending on AI tools, computing capacity and related infrastructure, changing technology budget allocations. He added that large and medium customers were also assigning a bigger share of their IT spending to AI projects.

Software growth may not translate into more jobs

Vembu said AI is making software development faster, but questioned whether that would lead to demand for a much larger number of software products worldwide. He said software is becoming a more crowded market, where competition is moving towards quality, reliability and brand value instead of just output.

He added that productivity gains from AI may not result in matching growth in demand or jobs. According to him, the software business is starting to resemble a commodity market, where growth slows as competition rises and it becomes harder to stand out.

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Vembu also asked which sectors would absorb workers if hiring in IT continues to weaken. "Extensive automation means that large scale manufacturing produces few jobs," he wrote.

"The 'only' question is how the economy is structured so people have the income to afford those affordable goods," Vembu added. He also said fast-growing AI companies are spending significantly on infrastructure and capital expenditure required for AI, even as doubts remain about whether those investments will deliver adequate profits.

His comments linked slower hiring in IT, rising AI and infrastructure costs, and the broader concern over where employment will come from as technology spending shifts and the software market becomes more competitive.