Artificial intelligence is reshaping the hiring pattern in India’s technology sector, with companies slashing fresher intake, deploying smaller teams and pushing to delink revenue from headcount, staffing firms and industry experts told ET.
The share of entry-level hiring in the sector has fallen to around 15% in 2025 from 28% in 2024 as companies focus more on AI, cloud, cybersecurity and automation-focused roles.
Emerging technology roles account for nearly 52% of hiring demand and are expected to touch 60% by the end of 2026, signalling a broader shift away from campus-led pyramid hiring model, experts said.
Leading IT services firms are now maintaining stable revenues despite flat or lower headcount, with utilisation levels rising to 84-87%, according to staffing firm Quess Corp.
“The IT services industry is clearly moving away from the traditional model where revenue growth depended on proportional headcount expansion,” said Kapil Joshi, chief executive of Quess Corp-IT staffing. “Enterprises and IT services firms are increasingly replacing large delivery teams with smaller, AI-skilled and multi-functional teams that can deliver higher productivity with lower labour intensity.”
The hiring reset marks a clear shift from the post-pandemic boom years when IT companies hired aggressively to meet surging digital demand.
According to data from staffing firms, fresher intake in the technology sector fell from around 380,000 in 2021-22 to 95,000 in 2023-24 before recovering modestly to about 120,000 openings in 2024-25.
This trend is visible at India’s largest IT firms. Tata Consultancy Services, which typically hired 45,000-50,000 freshers annually, brought that number down to around 25,000 this year, according to Pareekh Jain, chief executive of research and advisory firm EIIRTrend.
While fewer people are being hired, they command significantly higher pay. Infosys, for example, has created a specialist programmer role, paying Rs 21 lakh for freshers in AI and digital areas to compete with global capability centres and startups, Jain said.
The shift comes as enterprises globally ramp up AI spending while simultaneously pushing technology vendors to lower costs and prove measurable returns. Global research firm Gartner estimates generative AI spending will rise about 38% in 2026 even as overall IT budgets in several sectors remain under pressure.
“Enterprises are increasing AI funding, but cost optimisation pressures remain strong,” said Biswajit Maity, senior principal analyst at Gartner. Companies are increasingly using AI-led productivity expectations to renegotiate contracts and seek lower pricing from vendors, he noted.
That pressure is showing up in deal structures. Enterprises are renegotiating projects mid-contract and reassessing existing engagements to determine how AI can reduce costs and effort.
One enterprise recently halted a SAP modernisation project with a leading IT services provider to rethink how the work could be done using AI, according to Jain.
“Clients are rethinking deals to see how they can reduce spending using AI,” he said. “That is why despite new client work driven by AI, revenue growth remains subdued across IT service providers.”
Roles involving repetitive coding, manual testing, IT helpdesk support and data processing are among the most exposed to automation.
“Tech roles with lower complexity and rule-based actions are among the first to get impacted by AI,” said Kamal Karanth, cofounder of staffing firm Xpheno. “The sustained visible drop in fresher intakes in occupations with high AI exposure supports this shift.”
At the same time, enterprises are investing in AI readiness internally, working with IT services providers to set up AI offices, governance frameworks and data infrastructure. Major service providers are also strengthening partnerships with AI firms including OpenAI, Anthropic and Google to prepare for wider deployment of AI-led services.
The share of entry-level hiring in the sector has fallen to around 15% in 2025 from 28% in 2024 as companies focus more on AI, cloud, cybersecurity and automation-focused roles.
Emerging technology roles account for nearly 52% of hiring demand and are expected to touch 60% by the end of 2026, signalling a broader shift away from campus-led pyramid hiring model, experts said.
Leading IT services firms are now maintaining stable revenues despite flat or lower headcount, with utilisation levels rising to 84-87%, according to staffing firm Quess Corp.
“The IT services industry is clearly moving away from the traditional model where revenue growth depended on proportional headcount expansion,” said Kapil Joshi, chief executive of Quess Corp-IT staffing. “Enterprises and IT services firms are increasingly replacing large delivery teams with smaller, AI-skilled and multi-functional teams that can deliver higher productivity with lower labour intensity.”
The hiring reset marks a clear shift from the post-pandemic boom years when IT companies hired aggressively to meet surging digital demand.
According to data from staffing firms, fresher intake in the technology sector fell from around 380,000 in 2021-22 to 95,000 in 2023-24 before recovering modestly to about 120,000 openings in 2024-25.
This trend is visible at India’s largest IT firms. Tata Consultancy Services, which typically hired 45,000-50,000 freshers annually, brought that number down to around 25,000 this year, according to Pareekh Jain, chief executive of research and advisory firm EIIRTrend.
While fewer people are being hired, they command significantly higher pay. Infosys, for example, has created a specialist programmer role, paying Rs 21 lakh for freshers in AI and digital areas to compete with global capability centres and startups, Jain said.
The shift comes as enterprises globally ramp up AI spending while simultaneously pushing technology vendors to lower costs and prove measurable returns. Global research firm Gartner estimates generative AI spending will rise about 38% in 2026 even as overall IT budgets in several sectors remain under pressure.
“Enterprises are increasing AI funding, but cost optimisation pressures remain strong,” said Biswajit Maity, senior principal analyst at Gartner. Companies are increasingly using AI-led productivity expectations to renegotiate contracts and seek lower pricing from vendors, he noted.
That pressure is showing up in deal structures. Enterprises are renegotiating projects mid-contract and reassessing existing engagements to determine how AI can reduce costs and effort.
One enterprise recently halted a SAP modernisation project with a leading IT services provider to rethink how the work could be done using AI, according to Jain.
“Clients are rethinking deals to see how they can reduce spending using AI,” he said. “That is why despite new client work driven by AI, revenue growth remains subdued across IT service providers.”
Roles involving repetitive coding, manual testing, IT helpdesk support and data processing are among the most exposed to automation.
“Tech roles with lower complexity and rule-based actions are among the first to get impacted by AI,” said Kamal Karanth, cofounder of staffing firm Xpheno. “The sustained visible drop in fresher intakes in occupations with high AI exposure supports this shift.”
At the same time, enterprises are investing in AI readiness internally, working with IT services providers to set up AI offices, governance frameworks and data infrastructure. Major service providers are also strengthening partnerships with AI firms including OpenAI, Anthropic and Google to prepare for wider deployment of AI-led services.
