Why Senior Executives Are Worried about Compression Rates (And You Should Too).

Main Author - Srinivas A, Founder and Chief Scientist, Peopleverse.

Who do you invest in? Who do you let go of?

Last 3 weeks, I’d been speaking with several senior executives across the U.S., Asia and Europe, on something happening silently. A common, quietly urgent theme kept emerging in our conversations. It’s what’s being called the "compression rate": the accelerating pace at which artificial intelligence is transforming — and in many cases displacing — jobs within their organisations. It’s a growing concern that’s starting to dominate boardroom conversations worldwide.

Why this issue is on the radar, and why you should be paying attention too: AI adoption across the Industrial world is expected to only accelerate as more companies turn to AI-driven automation. One of them remarked, “Hardly a day goes by without news of a major company ramping up its use of artificial intelligence — or a fresh warning that AI is set to reshape our world in dramatic ways, sooner than we think.

Well, I recall what Anthropic CEO Dario Amodei predicted in May 2025: the First Billion-Dollar Solopreneur will come by 2026, and Artificial Intelligence could allow just one or two people to run that billion-dollar company.

Interestingly, I read an interview with Prof. Eric So, of global economics and management at the Massachusetts Institute of Technology. Where he said, “There’s a lot of focus on what we can do and not enough questions like ‘Should we do that?’ and ‘Is it being done in a safe way?’”

Some in the IT/ SAAS field estimate the compression rate will be 1:2, and some in the BPO services estimate it will be at 1:5. The Manufacturing sector is seeing huge investments in Dark Factories. The car/ auto software inside automotives is not in the hands of OEMs alone; it is now more in the hands of non-manufacturing, smaller players controlling the ecosystem.

Is it Fear-Mongering? Well, Yes and a No. What I see will unfold in India and Asia will be like this: First, it will start mostly from PVt equity firms/ Fin Tech, and Quick Commerce is already evident. Then customer service and then sales will see these compression rates. Though many of those I spoke to revealed compression rates will affect areas of repetitive work, repetitive or manual jobs, I feel it will not be so, it will be increasingly on knowledge-based and creative roles (e.g., legal, research, design, content creation, coding) of the white collar workforce.

Executives are being forced to rethink operational costs and labor structures. With AI tools offering 3x 10x productivity boosts, headcount reduction becomes a tempting cost-saving strategy, but it comes with long-term social and ethical consequences. Shareholders (ironically, who are also employees somewhere) are pushing for leaner, AI-augmented operations.

In India there’s a massive mismatch in senior leadership and employee skill sets and what’s needed to thrive in an AI-driven environment. The focus is now moving away from HR, Finance departments to IT departments. Upskilling programs are lagging, and executives are worried about organisational inertia — the company’s inability to adapt fast enough.

A more serious issue I see is that of some senior/ middle leadership executives who still believe integrating AI in business means using various generative AI products or agents. And unfortunately, it is not so.

Many of the decisions about AI-led layoffs or job redesign are highly visible and potentially damaging to the company's reputation. Executives face pressure to balance innovation with responsibility, especially in ESG-focused environments. Some are guessing if the routine is taken by AI, what will high-value work look like for a human?

The shift is noisily silent. Hard questions linger: Who do you invest in? Who do you let go of? Which roles will become redundant in two years… or five? — The compression is making long-term workforce planning more uncertain and risk-laden than ever before.

The Senior executives I spoke to are not just worried about job loss — they’re worried about business staying competitive, socially responsible, and future-ready.