Youth face long-term employment challenges from AI's rise
The advent of artificial intelligence has created valid concerns about loss of jobs despite the numerous opportunities that can emerge in certain segments. And while some risks have already materialised even in India – fintech firm PhonePe, for instance, cut its customer service team by 60% in the five years ended 2023-24 due to increased use of AI-driven chatbots – the situation is particularly perilous for the youth.
According to US-based venture capital firm SignalFire's State of Tech Talent Report 2025, released on May 20, hiring of fresh graduates by large technology firms in 2024 was down more than 50 per cent compared to 2019, while the decline was more than 30 per cent for start-ups. 'As budgets tighten and AI capabilities increase, companies are reducing their investment in new grad opportunities,' SignalFire said.
Youth unemployment
For Indian youth, circumstances are already difficult. According to the statistics ministry's inaugural monthly Periodic Labour Force Survey released earlier this month, the unemployment rate for Indians in the 15-29 years age bracket was as high as 13.8 per cent in April 2025, more than twice the all-India unemployment rate of 5.1 per cent, based on the current weekly status approach which measures unemployment by considering those persons who were available for work for at least one hour on any day in the seven days preceding the survey
Longer-term trends don't paint an encouraging picture either. According to a Centre for Social and Economic Progress paper 'India at Work: Employment Trends in the 21st Century' released last week, an analysis of data going back to 1983 shows that while the number of employed persons in the 15-24 age category increased to 6.20 crore in 2023-24 from 5.24 crore in 2017-18, 'over a longer period, there has been a decline or stagnation'.
Learning opportunities
To be sure, stagnant youth employment is a reflection of the paucity of jobs. But to prepare for a future which may present more opportunities, the key may be to seemingly get with the programme and 'become a sort of ninja using the latest (AI) tools,' Demis Hassabis, co-founder of Google DeepMind, said on The New York Times' Hard Fork podcast last week.
The problem for young Indians, however, might be a deeper one. As per the Indian statistics ministry's latest Time Use Survey, those in the 15-29 age group who were involved in learning spent 422 minutes per day on 'learning activities' in 2024, down 8 minutes per day from 2019.
Meanwhile, though most young Indians are fairly familiar when it comes to smartphones and the internet, their proficiency with basic tasks is not encouraging. According to the statistics ministry's Comprehensive Annual Modular Survey for 2022-23 (July-June), while 84.2 per cent of persons from across India in the 15-29 age bucket were able to use the internet, just 28.5 per cent could search for information, send or receive e-mails, and perform online banking transactions. Even if only those living in urban areas are considered, the proportion remains below half at 42.6 per cent.
Closing doors
While the use of AI in high volume and repetitive tasks – such as chat automation and digital marketing – frees up humans for more strategic and creative activities, it also somewhat shuts the door for fresh graduates who start at the bottom and move up the ladder.
The youth are already feeling the heat, with Gen Z workers in the US significantly more pessimistic than other generations, as per LinkedIn Market Research. In April 2025, their job confidence score – measured on a scale from -100 to +100 – fell 7 points year-on-year to +24. In comparison, baby boomers had a score of +44, with millennials at +40.
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