Artificial Intelligence (AI) is rapidly transforming the nature of work, organizational structures, recruitment, employee engagement, performance management, learning and development, workforce planning, and people analytics. As future Human Resource (HR) professionals, MBA-HR students need more than general digital skills; they require the ability to understand, evaluate, use, and ethically manage AI-enabled technologies. This study examines the level of AI literacy among MBA-HR students and evaluates their preparedness for the future of work. The paper focuses on students' awareness of AI concepts, familiarity with generative AI tools, practical application skills, critical evaluation abilities, ethical awareness, and confidence in using AI in HR functions. A descriptive and analytical research methodology is proposed, using a structured questionnaire administered to MBA-HR students. AI literacy is considered across functional, critical, ethical, and application-oriented dimensions. The study argues that AI literacy can improve students' employability, decision-making capabilities, productivity, and readiness for technology-driven HR roles. At the same time, excessive dependence on AI, data privacy concerns, algorithmic bias, misinformation, and inadequate understanding of AI limitations may create significant risks. The paper concludes that MBA-HR curricula should integrate AI literacy with HR-specific applications, ethical reasoning, data interpretation, and human-centred skills to prepare students for an increasingly AI-enabled workplace.