India’s middle class in crosshairs as white-collar employment slows, says Saurabh Mukherjea

India’s once-reliable white-collar employment engine is running out of steam, putting the country’s urban middle class directly in the firing line. Saurabh Mukherjea, founder of Marcellus Investment Managers, has issued a stark warning: the growth model that has fueled India’s professional workforce for over a decade is collapsing.

“Previously, white-collar employment was growing at 11% per year. Now it’s only 1%,” Mukherjea said during a recent podcast. “What previously doubled every six years has stabilized. It’s a dramatic stagnation.”

Between 2010 and 2020, India saw a sharp increase in white-collar employment, driven by the rapid expansion of information technology, business process outsourcing and customer experience roles. Cities like Bangalore, Pune, Hyderabad and Gurugram have become magnets for educated workers, enabling massive upward mobility and fueling consumption-led growth.

This trajectory, however, abruptly reversed. From 2023 to 2025, white-collar job growth slowed to just 1% per year, according to Mukherjea — a collapse that signals deeper structural stress rather than a temporary slowdown.

Technology and customer experience at the epicenter

The most immediate risk lies in technology and customer experience, the largest employers in India’s private sector, together accounting for around 8 million jobs. Mukherjea cited a joint report by NASSCOM, Boston Consulting Group and NITI Aayog that said up to 2 million jobs, or nearly 25% of the workforce, could disappear by 2031 in a worst-case scenario of AI disruption.

“This is not a speculative forecast,” he said. “This is leading analysis from credible think tanks and consulting firms.”

Warning signs are already visible. The Indian IT sector, which grew at an average annual rate of 16% for a decade, has now entered a phase of contraction. Employment growth has turned negative, declining by about 1% per year. “We are losing 10-12% of tech jobs every year,” Mukherjea noted, pointing to automation, AI adoption and slowing global demand.

Large companies have begun to respond to these changes. Tata Consultancy Services cut 12,000 jobs in 2023 – a small fraction of its total workforce, but symbolically significant for an industry long seen as a job creator of last resort. HCL Tech executives have openly talked about doubling revenue with half the workforce, signaling a decisive break from labor-intensive growth models.

At the same time, the World Bank’s South Asia Development Report reported a 20% drop in job postings for technology and customer experience roles, attributing the decline largely to the rise of generative AI.

Greater compression of the middle class

Mukherjea warned that the impact would not be limited to IT. Sectors such as media, finance, legal services and logistics – all large white-collar employers – are likely to come under similar pressure as the efficiencies generated by AI spread.

“The NITI Aayog report is the final straw,” he said. “It’s a pile of red flags, and they all point in the same direction.”

For the Indian middle class, the consequences are profound. Slowing job creation threatens wage growth, household consumption and social mobility, pillars that have underpinned India’s economic expansion over the past two decades.

“It’s no longer a forecast, it’s a live event,” Mukherjea said. “The question now is how to react before the damage becomes permanent. »