The exploitative potential of AI
Summary
AI has many productivity benefits, but those benefits may only accrue towards corporations who now have new tools to exploit workers.
The race to AGI has become a goal to justify extreme work hours.
“Startup culture” in the AI era is a narrative to normalise overwork and exploit cheap labour in countries like India.
Meanwhile while Indian tech companies benefit from tax cuts and soaring profits, they are laying off thousands while keeping salaries stagnant.
AI has become yet another tool to hire less, fire more and hide layoffs behind a word salad of corporate jargon.
I use AI every day. Some of the stuff I’ve written on this website may lead you to think of me as one of many AI cheerleaders. To a great extent, you’ll be right. But today’s article is one that I’ve been waiting to write for a long time. I wanted to be in a cold state before I opined on a topic that bothers me deeply.
It’s clear that for many knowledge-intensive jobs, AI offers us a productivity multiplier. There is evidence, though, that workers benefit little from these productivity increases. Capitalism has a fanatical, almost insatiable lust for cheap labour. They have a few choices when they discover a force multiplier such as AI.
Share the benefits to employees by reducing their work hours, giving them pay hikes, or increasing contributions to their pensions.
Share benefits with society by creating more jobs or through pro-social contributions, such as funding infrastructure, or basic needs such as healthcare and education.
Pocket all the benefits while:
cutting jobs through layoffs;
and making employees work longer than is legal.
Which option are most companies taking? Your guess is correct.
The race to AGI or the key to exploitation
AI has led the capitalists to develop a blatant disregard for legalities, let alone work-life balance. Earlier this year, Sergey Brin, founder of Google, said that a 60-hour work week is the “sweet spot” for productivity. Brin urged workers to be in the office “at least” every weekday, because employees are welcome to be in the office on weekends too, aren’t they? Why? Well, because Alphabet needs to “turbocharge” its efforts to win the race to AGI.
Who asked for this race? What’s the upside for an employee to work more than what the Fair Labour Act of Brin's own country legislates? Why can’t Brin “turbocharge” Alphabet’s efforts by hiring 50% more workers, instead of asking people to work 50% more? Why did Alphabet lay off thousands of people instead?
Brin isn’t alone in his exploitative call to action. Elon Musk is infamous for his “work like hell”, 100-hour week, though to his credit, he’s been consistent, with or without AI. Cognition’s CEO, Scott Wu, recently told his acquired Windsurf staff to choose a 9‑month buyout or commit to 6 days in the office and 80+ hour weeks. Wu added, “We don’t believe in work-life balance”. Jeff Wang, Windsurf’s chief executive, meekly termed Scott Wu’s exhortation a “return to startup mentality”. After all, he said, "This is ... the most competitive industry within the most competitive industry." One of his quotes hit me hard.
"This is just the culture now. We want to make sure this is what you sign up for."
Let those words sink in. This is just the culture now.
Don’t join if you want a work-life balance
A few weeks back, a friend said to me, “People shouldn’t join an early-stage startup if they want work-life balance.” The statement felt jarring to hear, but I didn’t want to debate my friend. But, as I stewed over that statement, I wondered if there’s a different set of laws that governs early-stage startups. Turns out, there aren’t.
India is the world’s cheapest large-scale labour market for knowledge work. Companies that incorporate themselves in India and slap AI on the back of their domain name can further exploit their workers. Invoke “startup culture” and the AI race to make workers feel like hamsters on a treadmill. At the rate that AI models are improving, there’s no end in sight to this race.
If this isn’t an insatiable lust for cheap labour, I don’t know what is.
India Inc - the most rotten of them all
The friend I quoted previously works for a charismatic founder. You know, the kind that’s quite popular on LinkedIn. In a recent post (search for it if you’re keen on the source), this founder talked about the “sacrifice” of being at their daughter’s dance class, at the cost of missing “valuable in-person moments” with their team. Since they trade off being in office with being with their child on Thursdays, they make “Fridays 2x more intense and intentional”. What a win, eh?
The same founder shared an inspirational Independence Day post today. They talked about how young Indians have “access to capital, education, and opportunities that are unprecedented”. I beg to differ. The only thing that’s unprecedented for young, salaried class knowledge workers is the scale of job loss and how poor their salaries are, vis-à-vis inflation.
Let’s first look at layoff numbers in India from the top tech employers (source India Today and Business Today).
| Company | Layoffs since 2022 |
|---|---|
| Infosys | 24,182 |
| Wipro | 21,875 |
| TCS | 10,818 |
| Tech Mahindra | 10,669 |
| Accenture (40% staff in India) | 19,000 (These are global figures. Accenture hasn’t provided India numbers) |
Meanwhile, as I’ve noted previously, salaries in India, particularly at the entry level, have remained stagnant for the last 25 years.
Two more things are “unprecedented”, by the way.
Taxes - corporations in India pay only ¾ of the tax rate they paid in 2010.
Profits - corporate profits have significantly outpaced GDP growth.
Here’s a table that’ll help you understand how an ordinary tech worker suffers, while corporations rake in all the benefits.
| 2010 | 2025 | |
|---|---|---|
| Fresher's salary in IT | 370,000 | 380,000 |
| Corporate tax rate | 30-34% | 22-26% |
| Consumers’ share of taxes | 65% | 80% |
| Corporations’ share of taxes | 35% | 20% |
Governments lower taxes for corporations so they invest in the economy and usher in new jobs. That promise remains unfulfilled as millions of graduates remain jobless with each passing year.
Couldn’t care less
AI has simply given Indian firms a new tool for exploitation. Pay less, hire less, fire more, contribute less and care less. Tech hiring at the entry level has slowed down by a massive 87% in some places. You could forgive companies for not hiring new people if only they cared for their employees.
Sadly, this too feels like asking for too much. Companies don’t even have the decency to call a layoff a layoff. After ridding hundreds and thousands of people of their jobs, corporations hide behind euphemisms to describe the entrenchments. Here are some examples I’ve heard.
Strategic workforce adjustment
Streamlining operations
Headcount rebalancing
Employment action
Reduction in force
Staff optimisation
Transitioning out
Reorganisation
Restructuring
Realigment
Rightsizing
I’m sure you’ve heard other terms, but here’s the truth. A layoff is a layoff, is a layoff. When an employer involuntarily terminates an employee’s job for reasons other than the individual’s performance, that’s a layoff. The least that a corporation can do is to grow a spine and pipe up. Call the layoff what it is, instead of hiding inside a word salad!
India’s IT “dominance” built on years of IT outsourcing growth also seems to be heading towards an unsavoury decline. As I’ve noted earlier on this site, traditional outsourcing models, such as time and materials, are on the decline. Large outsourcing firms have huge order books, but the clients that are signing are not always kicking off.
Amidst this uncertainty, are employers choosing to care for their workers, who grapple with high inflation, weak investment returns and a declining standard of living? Surely not! They’ve delayed salary hikes and withheld variable pay. Why? Because growth is single-digit and not double-digit. Since, for some firms, ₹44,500 crores ($5 billion) of profit feels underwhelming. Those firms choose to squeeze their workers instead of caring for them. New utilisation policies have kicked in for people who can’t influence their utilisation. That firm, with projected profits of $5 billion in FY 2025, is now mandating 86.5% utilisation and is capping bench time to 35 days each year.
And no, it’s not unreasonable to expect high utilisation or low bench time. Whose responsibility is it, though? The bosses, or the workers? It’s ludicrous to place the onus on the employee when it’s the employer’s responsibility to create work.
Of course, you can’t expect more when employers think of workers as “resources” and create “resource management groups” to utilise the said resources.
Every phenomenon I’ve quoted traces back to the “AI revolution” as one of the root causes and accelerants for worker exploitation. I fear the worst is yet to come. In a just society, governments will intervene on behalf of the people and rein in capitalists from acting only in self-interest. At least in India, I don’t expect such justice anytime soon.
Here’s something I’ve learned, though. Powerful corporations show a weak spine when they encounter worker collectives. Take the example of Germany, where any company with more than five employees must have an elected Works Council (Betriebsrat) to represent its workers. The purpose of the Works Council is to represent employee interests and facilitate the legally mandated system of codetermination (Mitbestimmung). In short, employers can’t make unilateral decisions. They must include employees in any decisions that impact their work conditions. Those decisions also include how employers leverage AI. Indeed, even behemoths like IBM have had to cooperate with their German Works Councils to reach a company-wide agreement on AI usage.
Tech workers in India are mostly un-unionised and have no collective bargaining power. We’re glorified freelancers at the mercy of powerful, unchecked corporations. I see no way out from the exploitation I’ve described, unless we find ways for collective representation and codetermination. While forming a nationwide or even a companywide union is a monumental task, the first step is conversation. It's time for tech workers to start openly discussing pay, working conditions, and the need for collective representation in their teams and communities. It’s high time we tipped our hats to our German counterparts and took a leaf out of their books.