Indian companies lag in workforce upskilling amid AI disruption, job cuts

Mint

21-05-2025

MUMBAI
:
Amid mounting fears of artificial intelligence (AI) replacing humans in generic roles, Indian companies remain significantly underinvested in workforce upskilling, highlighting a growing gap between technological disruption and employee preparedness.
A new report by upskilling platform upGrad, shared exclusively with Mint, reveals that only 50% of 12,000 respondents received any form of training at their workplaces in 2024-25. Only 16% said they undergo quarterly training.
'On one side, organisations are talking about investing in their people. But if one out of every two employees is unaware of any training opportunities, there's clearly a gap. Access to skilling needs to be improved," said Srikanth Iyengar, chief executive, upGrad Enterprise.
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This comes as skill requirements are changing fast. Employers are prioritising talent skilled in AI over traditional coding roles, while jobs in project management, data analysis, and content marketing are seeing reduced demand, Mint reported earlier in May.
'The net effect is changing skill requirements, not necessarily fewer jobs," said Hitesh Oberoi, CEO of Naukri.com, acknowledging that while some roles will be automated, new ones will emerge in a post on the social media platform X on 19 May.
'With the global shortage of AI specialists and India's strong foundation in technical education, we can position ourselves as a global AI talent hub—if we evolve our skilling ecosystem quickly," he said.
Too little, and it's getting late
For now, the impact appears to be hitting the current workforce and job seekers alike. Many startups, focused on profitability or planning to go public, have slowed hiring as they determine how AI will affect their operations.
Major tech-driven firms like Zomato, Cars24, and Gupshup have laid off employees in recent months, Mint reported.
When it comes to training existing talent, 60% of companies surveyed by upGrad allocate less than 5% of their human resources (HR) budgets to upskilling. Moreover, 61.5% of chief human resources officers (CHROs) reported no measurable impact from training initiatives, according to the report.
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'Enterprise upskilling in India remains underpenetrated because most firms treat it as a discretionary HR expense—already a cost centre," Iyengar said. 'But it's as essential as payroll. Without the right people, a business isn't scalable or sustainable."
Experts say relying on firing employees and hiring pre-skilled talent rather than training existing staff is a short-sighted strategy.
'A hire-and-fire model undermines India's long-term talent advantage. Unlike ageing Western economies, India's edge lies in its youthful population. To preserve that edge, we need to invest in developing talent, not just replacing it," said Jawahir Morarji, president-enterprise business at upskilling firm Emeritus.
A shortcut is certainly not the best route
The Economic Survey 2024-25 pegs India's median age at 28. Layoffs and job replacements aimed at short-term cost-cutting could weaken this demographic advantage.
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Moreover, bringing in new talent is expensive and time-consuming. 'In high-speed sectors like information technology (IT) and fintech, new hires can take 3-6 months to become fully productive," said Ritesh Malhotra, enterprise head at Great Learning. 'As technology evolves rapidly, even 'pre-skilled' hires may require role-specific training after joining."
The upGrad report also found that 75% of employees engage in learning only when it is mandated. At first glance, this may suggest a lack of interest from the workforce itself.
However, experts argue that employees often struggle to identify which specific skills they need to develop, leading to poor training outcomes and wasted resources. In many cases, programmes aren't customised to suit the needs of different teams or roles.
For example, Gen X workers prefer expert-led sessions, Gen Y favours flexible yet structured formats, and Gen Z leans towards immersive, on-demand learning. Still, 63% of HR leaders do not tailor learning initiatives by generation, the survey showed.
Of the 12,000 employees surveyed, close to 40% were CHROs, management-level or C-suite executives.
HR leaders from 1000+ companies participated in the survey.