HCLTech CEO C Vijayakumar Says AI Transition Will Be Painful but Indian IT Sector Has Strong Future

Indian IT Sector at a Critical Inflection Point Amid AI Disruption​

Mumbai, February 24: Amid rising concerns over job security and the long term relevance of India’s nearly USD 300 billion IT services sector, HCLTech Managing Director and Chief Executive Officer C Vijayakumar said the ongoing shift driven by artificial intelligence will be painful, but not fatal for the industry.

Speaking at the Nasscom NTLF event in Mumbai, Vijayakumar stressed that the current transformation is fundamentally different from previous technology cycles because it directly impacts people and roles across the ecosystem.

AI Transition Involves People, Making It More Complex​

According to Vijayakumar, the AI led transition is unlike earlier shifts such as the Y2K opportunity, when the industry successfully adapted to global demand. This time, the disruption touches the human layer of the business.

He noted that global technology companies, including some in India, have already initiated layoffs as AI models increasingly automate tasks and enhance efficiency. However, he cautioned against writing off the Indian IT services industry.

“This transition is different from the other transitions. It is going to be painful because it really involves people,” he said.

Enterprise Complexity and Domain Expertise to Drive Relevance​

Despite investor anxiety over IT stocks, which he described as overblown, Vijayakumar asserted that the core strengths of Indian IT firms remain intact.

He highlighted that IT services companies operate in highly complex enterprise technology environments. The ability to manage large scale architectures and apply deep domain expertise will continue to ensure relevance in a rapidly evolving AI driven world.

Calling the current phase the biggest inflection point for the Indian IT sector, he described it as an opportunity to reimagine the industry over the next five to ten years.

Coding Is Only Part of Software Development​

Referring to advancements in generative AI models such as Claude by Anthropic, Vijayakumar pointed out that coding represents only around 30 percent of software development.

While AI tools may become highly efficient at writing code, a significant portion of development work involves broader system design, integration, testing, domain alignment, and enterprise transformation. This, he suggested, leaves substantial scope for human expertise.

He added that demand for specialized skills is likely to rise, with professionals needing to focus on innovative and higher order work rather than repetitive tasks.

Reskilling and Productivity Gains Central to Future Strategy​

Vijayakumar emphasized the need for large scale reskilling within the industry. He said companies must enable employees to use AI tools effectively, allowing the same individual to deliver up to four times the efficiency.

On recent advancements in streamlining COBOL code conversion, he noted that modernization of decades old mainframe systems is a broader exercise. Converting COBOL is only one component of that transformation, suggesting that legacy modernization will continue to create opportunities.

SaaS Firms and Hyperscalers May Face Pricing Pressures​

While expressing optimism about IT services, Vijayakumar flagged potential challenges for software as a service companies that have reported strong growth in recent years by charging premium pricing. He indicated that maintaining similar pricing power could become difficult.

He also suggested that hyperscalers investing heavily in infrastructure may face pressure if revenue growth does not justify the scale of capital expenditure.

Promising Road Ahead for Indian IT Services​

Reiterating that the Indian IT industry has a promising road ahead, Vijayakumar underscored that adaptability has been a defining trait of the sector.

As artificial intelligence reshapes global technology services, the industry’s ability to reinvent itself through reskilling, enterprise expertise, and innovation will determine how it navigates this historic transformation.