IT sector job growth slows down

Zoho founder and chief scientist Sridhar Vembu warned Sunday that India’s biggest economic hurdle is providing jobs for its youthful population, noting that the nation’s IT sector has slowed hiring as firms shift spending toward artificial intelligence and data‑center infrastructure.

IT hiring stalls as AI budgets rise

Vembu posted on X that the real issue facing the nation is how to create jobs for its massive cohort of youth in this uncertain global environment. He added, “Sadly, the IT industry, including Zoho, has not created many jobs in recent years. They have not laid off people, but they are not creating new jobs either.”

The founder said money that previously funded new employee positions is now being redirected to AI and data‑center costs, citing rising server and memory prices as a key driver. “The money that would have gone to new employees is now going to AI and data center costs, the latter due to the steep rise in server and memory prices,” he wrote, noting that while Zoho is trying to control those expenses, “a lot of that is out of their control.”

Software market maturing, but demand uncertain

Vembu stated that the global market may not need more software, even as AI accelerates development cycles. While AI allows them to produce more software quicker, the over‑saturated global software market has limited need for additional software.

He likened software to a commodity, suggesting growth slows as competition shifts toward quality, reliability, brand, and other factors. Large and mid‑size enterprise customers are reallocating IT budgets toward AI, while fast‑growing AI firms are borrowing heavily to fund capital expenditure. This raises doubts about whether those companies will generate the profits needed to justify such investments.

Automation is also curbing job creation in manufacturing. Extensive automation means that large‑scale manufacturing produces few jobs, Vembu noted, describing the paradox that cheaper goods may leave fewer workers with wages to purchase them.

Some observers point to universal basic income as a possible safety net, a concept Vembu said already exists in India in the form of “freebies.” He warned that political pressure could mount.