Where the truth lies is important for India. The IT industry may employ only a few million of India’s 1.3 billion people—but it has been a beacon for young men and women with aspirations. It motivated families to send their children to university, placed graduates in gleaming campuses, conferred independent urban lifestyles upon them, and provided stable incomes and access to the world outside India. Over the last 30 years, moreover, it has been the only industry in India to begin from seed and bloom to such success. India is otherwise struggling to create jobs: 12 million Indians enter the workforce every year, but only 135,000 jobs in the formal economy’s eight biggest sectors—including IT—were created in 2015. A dramatic contraction of the IT industry—a dimming of the beacon—would jolt the country’s economy and polity deeply.

Taking out the swivel chairs

Chetan Dube says he saw it coming. In 2005, Dube, the CEO of a company called IPsoft, was addressing a forum of IT companies in Mumbai. “If Indian industry does not wake up to the automation wave that is coming, then we will face an existential crisis,” he remembers telling the gathering. “I got chastised. The next day, we were having breakfast, and at the back of the Economic Times, an article said: ‘IPsoft CEO predicts the death of Indian outsourcing.’”

Bansal reckons that the IT sector hired 400,000 people annually until two or three years ago, and that the number has now shrunk to 140,000 to 160,000. Soon, he says, “net hiring will be barely above zero.”

Dube, a bow-tied and suspendered mathematician who once taught at New York University, founded IPsoft in 1998, but it was in 2014 that the company launched what is now its flagship product, Amelia. A conversational service agent, Amelia is designed to replace the humans who field customer queries in call centers and back offices. Amelia has been used to resolve suppliers’ questions for a large oil and gas firm; it runs the live chat service for SEB, a Swedish bank; it works in another bank’s team of mortgage brokers. For one client, Dube says, the average time to reach a conventional offshore agent used to be 55 seconds; an incarnation of Amelia made itself available in two seconds or less. An offshore agent needed 18.2 minutes, on average, to resolve a query successfully; for Amelia, it was 4.5 minutes. The customer service sphere is filling rapidly with products like Amelia—chatbots that, through text or voice, obviate the human presence altogether.

Only in a few cases has Amelia directly supplanted Indian workers, but Dube thinks that further change is inevitable. Call centers in India are already in flux: salaries have crept up, attrition has always been high, and firms like Infosys and Tata Consultancy Services have offshored some of their functions farther out to Manila, where labor costs are even lower than in India. (Three years ago, one official in an industry body named Assocham predicted gloomily that India would lose $30 billion in call center revenues to the Philippines over the following decade.) In the West, some companies are repatriating their voice service operations, while others are abandoning them altogether in favor of e-mail or chat help desks.

The prospect—or fear—of automation has thus become one more force reshaping the call center business. Voice recognition isn’t anywhere close to perfect yet, and even the sophisticated cognitive agents of the vaunted near future may not be able to parse rambling customers, complicated problems, or uncommonly thick accents. But most voice work is prosaic and repetitive. Given that humans in the first tier of this service calibrate their responses with the help of a script, their functions are among the simplest to transform into machine code.

Other fruit hangs similarly low elsewhere in the sector; as Dube says, “India is nothing but the blue-collar worker of IT,” so the lowest layer of work is plump with tasks that need diligence and stamina but not creativity or sharp technical skill.

At Genpact, a 20-year-old company that began in business process outsourcing before expanding into other services, there’s a lot of “swivel-chair work,” says Gianni Giacomelli, who leads the firm’s digital solutions business. The term captures the mechanical nature of these tasks. Until recently, a human has been required to deal with software systems that help with enterprise functions. Those systems are often disconnected from each other, so Genpact’s employees “are asked to process, very basically, things that come from one system and go into another system,” he says. “That toggling back and forth is a massive waste of time.” Since 2014, Genpact has been replacing workers in swivel chairs by ordering computers to take information from screens and servers and convey it into another system.

One level up is the kind of work that Giacomelli calls “reconciliation”: examining invoices and bills from a client’s various vendors and customers, with all their discrepancies and contradictions. It isn’t trivial work; it involves, right now, some grains of human judgment. “But once machines have seen enough of those things, they can do that kind of stuff,” he says.

Mayhem

For some of its clients, the IT colossus Infosys has been able to automate nearly all of the most routine chores of monitoring and maintaining their data infrastructure, says S. Ravi Kumar, the company’s deputy COO. Some intermediate work, such as triaging IT service requests, is now done by machines as well. At a still-higher level of service complexity—jobs that involve troubleshooting bugs deep within the code, or developing solutions to new problems—35 to 40 percent of tasks are performed by automated routines.

Overall, Somak Roy, an analyst at Forrester Research, estimates that only a quarter of the most easily automated work in India is being completed exclusively by machines. Companies are still enthusiastically dabbling in technologies that remain nascent. Nonetheless, Roy calls it a “distinct possibility” that IT will “cease to be a large-scale employment generator in India.”

One of the direst visions comes from Pankaj Bansal, the chief executive of PeopleStrong, a human-resources firm that frequently staffs IT companies with engineers. For IT services firms in the shape and form India has known them, Bansal says, “it will be mayhem.” He has been accused of fearmongering, but he holds fast to his assessment. Over the last two years, three or four out of every 10 jobs in the bottom layer of the pyramid of IT work have been “squashed” by automation, he says—and this has been manifested not in how many people have been laid off but in how sharply recruitment has dropped. Companies once gusted through the campuses of engineering colleges, picking them clean of fresh graduates. Bansal reckons that the IT sector hired 400,000 people annually until two or three years ago, and that the number has now shrunk to 140,000 to 160,000. Soon, he says, “net hiring will be barely above zero.”

There is a tension between the long arc of ­technological revolutions and the far shorter one of ­human lives.

Bansal’s prophesy of a deflating workforce may well come true for another reason. For years, IT firms hired inexpensive, hardworking youngsters wholesale—even if they were poorly skilled—because it made sense to staff projects heavily. The more warm bodies assigned to a task, the higher the bill that could be presented to the client. But the practice of calculating bills in this manner has waned; customers now pay for outcomes and impact. Meanwhile, the poorly skilled youngsters who stayed with their firms have received promotions and raises with clockwork regularity, until they’ve turned into mid-rung engineers who are now too costly, in their thousands, to sustain. Cue the purges.

Within the industry, Bansal’s grim views encounter profound disagreement, at least in public. Perhaps this is understandable: it has never been wise for companies to be effusive about the imminence of layoffs and workforce reductions. Sangeeta Gupta, a senior vice president at an industry body called the National Association of Software and Services Companies, predicts only a “decoupling” of revenues and head count over the next few years. If Indian IT required three million employees to touch $100 billion in annual revenue, she says, it will need only 1.2 million to two million additional people for its next $100 billion. By 2025, when revenues reach $350 billion, Gupta predicts, the sector will have added another 2.5 million to three million jobs to the four million it holds today.

Companies are eager to explain why automation won’t hollow out, and might even expand, their swarms of employees. For one thing, it isn’t as if machines can make people instantly redundant. “Jobs are not structured in such a clean way,” says Giacomelli, at Genpact. The architectures of modern work that have developed over decades all have human beings at their center; they rely upon people’s agility and their capacity to hold different things in their minds. “People do many things, so it’s not that easy to extricate one task or the other and make that happen through AI,” he says.