AI is creating more jobs than it destroys in India, but freshers face the squeeze

AI is creating more jobs than it is destroying in India — for now. But the bigger disruption is playing out at the entry level, where companies are hiring fewer freshers even as demand for experienced workers rises, according to a Nomura report.

India is emerging as ground zero for AI-driven disruption in Asia’s labour market, given its huge workforce and position as the world’s back-office and IT-services hub.

Also Read: India's unemployment rate drops to 5.1% in July as job market improves, more women join workforce


Nomura’s Beyond the Headlines: AI Has Added Jobs in Asia – So Far analysed 69 company announcements across Asia, mostly from 2022 to August 2026. It found around 131,000 AI-related jobs were created, versus 61,000 jobs lost.

India, along with China and the Philippines, has so far seen a net positive impact from AI-related employment.

But there is a catch.

The jobs being created by AI are not necessarily the jobs being lost to AI — and that is particularly bad news for young workers and fresh graduates.

AI is squeezing entry-level jobs

Nomura describes the emerging labour market as a K-shaped split, with demand for entry-level workers falling while companies continue to value senior employees with deeper business knowledge, management experience and interpersonal skills.

In India, a survey of 651 IT firms by the Indian Council for Research on International Economic Relations found that 55% of companies reported a decline in entry-level hiring, while only 14% reported a decline in hiring for senior-level roles.

In South Korea, youth employment among people aged 15-29 fell by 211,000, with almost all of the decline taking place in industries with high AI exposure, according to research by the Bank of Korea. At the same time, employment among workers in their 50s rose by 209,000, with more than two-thirds of that increase coming from highly AI-exposed industries.

India's 'silent' AI layoffs

Companies are increasingly adjusting to AI by hiring fewer people rather than firing large numbers of existing employees.

In India, staffing firm Xpheno estimates that net hiring in the IT sector fell from around 600,000 in FY22 to 140,000 in FY26. Much of the adjustment has happened through reduced campus recruitment and slower hiring rather than mass layoffs.

Nomura calls this “silent firing” — a trend that is less politically visible than large-scale layoffs but could have a significant impact on young people trying to enter the workforce.

Where AI is cutting jobs

The AI-related layoffs recorded by Nomura are concentrated heavily in financial services and technology.

Financial services accounted for around 58% of documented AI-related layoffs, while the technology sector accounted for another 30%.

Banks are a good example of the shift. AI allows them to expand certain operations while maintaining leaner teams, Nomura said.

The jobs most vulnerable so far are largely routine or lower-skilled roles.

Also Read: Top 10 private banks cut over 10,000 jobs in FY26 as AI reshapes hiring

These include banking back-office functions such as reconciliation, compliance and data entry, customer service roles increasingly handled by chatbots, and junior technology jobs such as quality assurance testing and entry-level coding.

Physical and high-touch sectors, meanwhile, have seen relatively few AI-linked layoffs. Manufacturing, construction, healthcare direct care and education remain harder to automate because they involve physical work or complex human interactions.

But AI is creating jobs too

More than 90% of total AI-related job creation identified by Nomura was concentrated in technology, with less than 10% spread across other sectors.

In India, the new jobs have largely been in areas such as data annotation, linguistics and AI-related IT services.

China, by comparison, has seen more hiring of highly skilled graduates working on developing and scaling proprietary AI models.

Outside technology, AI hiring remains relatively niche. Examples include AI risk analysts in banks and specialists working on autonomous vehicles.

Nomura expects more jobs to emerge outside the technology sector as AI adoption becomes broader. But that spillover has not really shown up in the data yet.

India could be the biggest test

India has built a huge IT-services and business-process outsourcing industry around tasks that are increasingly becoming easier for AI systems to perform.

That makes some traditional entry-level and back-office jobs vulnerable. At the same time, India's large pool of engineering and technology talent gives it an opportunity to benefit from the new demand created by AI.

So far, Nomura's conclusion is that AI has been a net positive for jobs in India. But that may not tell us much about what happens next.

AI is evolving rapidly from simple task automation towards agentic systems, with the possibility of much more capable AI systems further down the line. The impact on labour markets could therefore change considerably over the next few years.

The early numbers may offer some comfort to those worried about an AI jobs apocalypse. But for India's fresh graduates, the disruption is already visible — and the question is no longer simply whether AI will take jobs, but whether it will take away the first rung of the career ladder.