Do AI-Adopting IT Firms and GCCs Gain Market Share and Expand Faster Than Non-Adopters, And What Does That Imply for Sector-Wide Labor Demand?

Abstract

This paper investigates if companies in India's information technology (IT) services sector and global capability centres that have adopted artificial intelligence (AI) grow at a faster pace when compared to those that have not adopted such technologies and explores the implications of this transformation for labour demand.The analysis uses the data collected through the financial reports of firms, labor market information, and public reports and It adopts graphical and comparative analysis to study the dynamics of AI adoption, revenue expansion, job creation, and recruitment. The results reveal that companies characterized by a greater degree of AI adoption have much better revenue indicators than those characterized by a lower degree of AI adoption, thus confirming the assumption that AI makes companies more productive and efficient and improves their competitive position. At the industry level, however, there is a situation where revenue expansion is much faster than job creation, which indicates weakening relationship between output growth and labor demand. Though net hiring slows down, total job roles in the industry still grow which suggests that AI does not eliminate jobs, but restructures labor demand since the trend now indicates that routine tasks are becoming less and less common. The study concludes that AI is shifting India’s technology sector from labour-cost driven growth to innovation and productivity driven expansion, making reskilling and workforce adaptability essential for inclusive and sustainable growth.