Indian IT firms may lose 20-30% revenue

Indian IT firms are staring at a scenario in which 20-30 per cent of revenue-generating work can be automated through integration of Generative AI(GenAI) applications in the coming days. This can trigger a large scale displacement of current workforce involved in executing those projects.

According to global IT consultancy firm-HFS, 20-30 per cent of total revenues of many IT firms come from testing and quality assurance. Such work can be easily integrated with GenAI applications, making much of the work automated.

“When you consider that 20-30 per cent of revenues for Indian-heritage IT services providers involve testing and quality assurance, it’s clear that there is growing pressure to weave GenAI into bread-and-butter IT areas like testing, routine maintenance and development,” HFS has said in a post.

According to experts, Indian IT firms are susceptible to see large scale displacement of people unless they integrate GenAI in all their project work and reskill employee base.

“The Indian IT service providers are now competing with budding startup ecosystem, aggressively scaling technology companies, and growing GCCs for ‘talent’. This is making it extremely difficult for them to innovate while remaining frugal. Besides, Generative AI and its most expected repercussions, for instance- automating code development, testing environments and routine maintenance slowed growth considerably (in FY24),” Ashish Chaturvedi, a practice leader at international IT consultancy firm, HFS Research told Bizz Buzz. “The mayhem is not over and the Indian IT industry may lose about a million jobs in the next 18 months unless they take corrective steps,” Chaturvedi added.