The I-T sector is navigating a perfect storm -- subdued global tech spending and the disruptive momentum of AI. The old model of tying revenue growth to headcount expansion is dead. The new mantra: doing more with less
AI and robots will replace all jobs. Working will be optional -- like growing your own vegetables instead of buying them from the store." This was how the world's foremost innovator and entrepreneur, Elon Musk, reacted to a New York Times story on Amazon -- the second-largest employer in the US, with over 1.2 million employees -- which is quietly working to replace almost half of its workforce with robots.
The NYT story has dropped the 'automation bomb', which only a few years ago sounded like another Hollywood sci-fi plot. It no longer is, if you go by Amazon's plan to automate 75% of its operations.
According to the report, Amazon's robotics team plans to replace more than 600,000 jobs with robots. The calculus is purely economic: achieving this could save 30 cents on every processed and delivered item. Automation would also help the company avoid hiring 1,60,000 US employees by the end of 2027, resulting in savings of about $12.5 billion over the next two years.
This is not a distant vision -- its testing ground is in Shreveport, Louisiana, where a warehouse swarming with a thousand robots operates with 25% fewer humans. The company's strategy involves drastically slowing hiring and reducing its workforce through attrition, with the explicit goal of "flattening Amazon's hiring curve over the next 10 years".
The NYT report quoted Daron Acemoglu, MIT professor and Nobel laureate in economic sciences, as saying: "Nobody else has the same incentive as Amazon to find the way to automate... Once they work out how to do this profitably, it will spread to others too."
Operations in India, where labour remains cheaper than robots, are untouched by this development -- at least for now.
Walmart, another retail behemoth, is following suit. The company is aggressively automating its supply chain, with over half its distribution centres currently undergoing upgrades. By the end of this year, Walmart expects 65% of its stores to be serviced by these high-tech hubs.
The reach of this technological wave extends far beyond the warehouse floor. Industrial shop floors are now testing the next level of automation, replacing task-specific robots with humanoids that -- unlike traditional robots -- "hold the promise of broad adaptability across a wide range of functions", according to a McKinsey report. Automotive giants like BMW, Mercedes-Benz, and Tesla are already experimenting with humanoid-run shop floors.
The corporate office, once the bastion of human-centric knowledge work, is now a primary target for AI-driven efficiency. McKinsey's analysis shows the consumer sector is particularly ripe for disruption. By 2035, technology -- from basic automation to generative AI -- could affect up to 55% of workers' current activities, "from the front line up through the C-suite".
Indian fallout
The Indian IT sector -- one of the country's biggest job creators over the past three decades -- is also realigning its operations and workforce to adapt to disruptive technologies such as AI and machine learning (ML). The massive job cuts at TCS are being attributed to its need to make itself "future-ready" for an AI-led era. It is no longer mere speculation that AI can perform the work of coders and developers.
Technology giant IBM recently announced the development of 'Bob' -- a personified AI agent that supports the full lifecycle of application development, from coding to deployment.