AI Could Wipe Out $200 Billion of IT Services Work by 2030: BCG

Artificial intelligence is expected to reshape the global IT services industry by automating existing tasks while creating new business opportunities. According to a report by Boston Consulting Group (BCG), AI could eliminate approximately $200 billion worth of existing technology services work by 2030, forcing companies to rethink their business models, workforce strategies and client contracts.

The report, titled The Talent Is Already on Your Payroll. The Clock Isn't, estimates that the global technology services market could grow from approximately $1.6–$1.7 trillion to $2.2–$2.4 trillion by 2030. AI-led services are expected to contribute $300 billion to $400 billion to this expansion. However, productivity gains from automation could reduce demand for certain traditional services, leaving a net opportunity of approximately $100 billion to $200 billion.

AI Could Disrupt Traditional IT Services

For years, IT services companies have relied on large teams of employees to deliver software development, application maintenance, technical support and business-process services. Revenue has often been linked to the number of employees assigned to a project and the time they spend completing it.

AI tools and autonomous AI agents are changing this model by completing certain tasks with less human effort. Activities such as routine IT support, application maintenance and repetitive business processes are increasingly suitable for automation.

As a result, companies may need fewer employees to complete some existing assignments. This could put pressure on revenue generated through traditional staffing-based contracts, even when service providers deliver work more efficiently.

However, the impact will vary by service category. Complex projects requiring specialised knowledge, business judgment, integration and human oversight may continue to require substantial expertise.

Indian IT Companies Face a Major Challenge

India is one of the world's largest technology services hubs, making the transformation particularly important for the country's IT industry.

According to BCG managing director and partner Sreyssha George, Indian firms account for approximately 60% of the technology services market. The report highlights the potential scale of the disruption if AI reduces the amount of human effort required to deliver traditional services.

The challenge is not simply whether companies adopt AI tools. They must also determine how to generate revenue when clients can achieve the same outcomes with fewer billable hours.

Indian technology companies may therefore need to develop new services, redesign project delivery and demonstrate measurable business value rather than relying primarily on the number of employees assigned to a contract.

The Shift from Headcount-Based Billing to Outcome-Based Contracts

One of the biggest changes expected from AI adoption concerns how technology services companies charge their clients.

Under traditional arrangements, clients often pay according to the number of employees involved, the hours worked or a fixed project price. AI agents can reduce the number of people required to complete a task, making conventional billing models harder to sustain.

BCG's analysis points towards a gradual shift to outcome-based contracts, in which clients pay for measurable results rather than simply for the effort involved.

For example, a service provider might be paid according to the successful resolution of support requests or the delivery of a defined business outcome.

However, this transition presents challenges. Companies and clients must agree on performance measures, establish reliable baselines and determine how to evaluate results. The costs of implementing, operating and supervising AI agents must also be considered.

According to the Economic Times report, outcome-based deals still account for a relatively small share of the market, indicating that the transition remains at an early stage.

AI Could Change Hiring Patterns in India's IT Sector

AI adoption could also reshape employment opportunities, particularly for fresh graduates entering the technology industry.

Traditional IT services companies have historically employed large numbers of entry-level workers to handle testing, coding, maintenance and support tasks. As AI automates parts of these activities, employers may increasingly expect new recruits to possess practical AI skills and contribute productively from the beginning of their careers.

BCG's analysis identifies more than 40 applied AI roles that can be developed from existing technology positions. These include specialised engineering, AI operations and client-facing roles focused on implementing AI solutions.

The report does not suggest that fresher hiring will disappear. Instead, recruitment requirements are likely to change, with greater emphasis on practical skills, adaptability and the ability to work alongside AI systems.

For students and early-career professionals, developing skills in AI application development, data engineering, cloud technologies, automation and problem-solving could improve their ability to adapt to changing employer expectations.

Applied AI Skills Become Increasingly Important

The report identifies a significant gap between traditional technology services companies and businesses built primarily around AI.

BCG estimates that professionals performing applied AI work account for only 10%–15% of the AI-tagged workforce at traditional technology services firms. At AI-native companies, the corresponding share is approximately 90%–95%.

Applied AI involves building, deploying and operating AI solutions in real business environments. This differs from simply using AI tools to complete existing tasks more quickly.

Closing this gap will require IT companies to invest in employee training, establish clearer AI career paths and give workers opportunities to develop practical experience.

Hiring external specialists may still be necessary for certain positions, but relying entirely on outside recruitment could increase costs and intensify competition for scarce talent.

New AI Opportunities Could Offset Traditional Revenue Losses

Despite the potential disruption, BCG's findings do not indicate that the technology services industry is necessarily heading towards overall contraction.

The projected $300 billion to $400 billion in new AI-related services could more than compensate for the estimated $200 billion reduction in existing work.

Potential growth areas include developing and deploying AI agents, modernising enterprise systems, managing AI infrastructure, integrating AI into business workflows and monitoring the performance and security of AI-enabled systems.

Companies will also need human expertise to supervise AI agents, manage exceptions, maintain compliance and ensure that automated systems operate reliably.

Technology services providers that successfully develop these capabilities could capture new revenue opportunities as businesses expand their use of AI.

What Lies Ahead for the IT Industry?

The next phase of AI adoption is likely to reward companies that can combine technical expertise with a clear understanding of client requirements.

Indian IT companies may need to reconsider traditional workforce structures, develop applied AI talent internally and create commercial models tied more closely to measurable outcomes.

Employees will also need to adapt by learning new technologies and strengthening skills that complement automation, including critical thinking, communication, system design and industry-specific knowledge.

Although AI could reduce demand for certain existing services, it could simultaneously create new roles and business opportunities. The overall effect will depend on how quickly companies adapt and how successfully they convert AI capabilities into services that customers are willing to pay for.

Conclusion

BCG estimates that AI could displace approximately $200 billion in existing IT services work by 2030, even as it creates $300 billion to $400 billion in new opportunities. The global technology services market could consequently reach $2.2–$2.4 trillion.

For India's IT industry, the key challenge will be adapting to changing client expectations, new billing models and evolving skill requirements. Companies that invest in applied AI, reskill their employees and focus on measurable outcomes may be better positioned to benefit from the transformation.

The message is clear: AI is not simply changing how IT services are delivered. It is also changing what clients buy, how providers earn revenue and which skills will be most valuable in the years ahead.