“AI NOT A THREAT, BUT A FORCE MULTIPLIER”

Global and domestic IT majors have shed employees due to the adoption of AI.

- G. VENKATESH, DIRECTOR, SCHOOL OF TECHNOLOGY, DHIRUBHAI AMBANI UNIVERSITY, GANDHINAGAR, GUJARAT, AND FELLOW AND DIRECTOR, SASKEN TECHNOLOGIES

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.