‘We are not creating new jobs’: Zoho’s Sridhar Vembu flags AI’s impact on IT hiring

India’s technology sector may be gaining productivity through artificial intelligence, but it is struggling to create enough jobs for the country’s growing young workforce. A prominent industry leader has warned that money once reserved for hiring employees is increasingly being spent on AI infrastructure and data centres.Sridhar Vembu said rising AI and data centre costs had slowed job creation in India’s IT sector.(Also read: Zoho’s Sridhar Vembu says AI is the ‘only technology that will matter’, sparks discussion)Zoho founder Sridhar Vembu shared his concerns in a detailed post on X, highlighting the challenges facing the IT industry and the wider economy.‘IT companies are not creating enough jobs’“The real issue facing our nation is how to create jobs for our massive cohort of youth in this very uncertain global landscape. Sadly, the IT industry, including Zoho, have not created many jobs in recent years. We have not laid off people but we are not creating new jobs either,” Vembu wrote.He explained that funds which could previously have been used to recruit new employees were now being diverted towards AI and data centre expenses.“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. We are trying to control those costs but a lot of that is out of our control,” he added.Vembu also questioned whether the already crowded global software market needed significantly more products, even though AI was helping companies develop software faster. According to him, the industry’s focus would gradually shift towards quality, reliability and brand value, while overall growth would become slower.Can other industries create enough employment?The Zoho founder further noted that large and mid-sized enterprises had also redirected a significant portion of their technology spending towards AI. At the same time, rapidly growing AI companies were borrowing and investing heavily in capital expenditure without any certainty that they would generate enough profits to justify those investments.(Also read: Indian-American founder slams Zoho’s Sridhar Vembu over Delhi protest remarks)“What other industry can pick up the slack? Extensive automation means that large scale manufacturing produces few jobs,” he wrote.Vembu said automation could make advanced products more affordable reducing production costs. However, he argued that the bigger challenge was ensuring people had sufficient income to purchase those goods.“The ‘only’ question is how the economy is structured so people have the income to afford those affordable goods. That ‘only’ question, simple in theory, is not easy in practice,” he said.Take a look here at the post:Internet users reactShared on Sunday, the post has amassed more than 138,000 views. Reacting to it, one user wrote, “AI is improving productivity, but job creation remains the real challenge.” Another commented, “This is the uncomfortable reality of the IT sector today.” A third person said, “Yes, I agree with you sir,” while another observed, “More technology does not always mean more employment.”