Over the last two decades, India’s tech services sector has thrived on volume hiring, largely driven by Level 1 (L1) roles—entry-level positions tasked with repetitive, low-complexity work such as basic coding, maintenance, and support. Notably, these jobs formed the foundation of employment across industry giants like TCS, Infosys, Wipro, and others.
However, a quiet transformation is now underway. The industry is witnessing changes in hiring patterns, not due to a fall in tech talent demand, but because of the evolving nature of the work itself.
This shift is reflected in hiring data from some of the biggest IT employers. TCS, despite being India’s largest IT services firm, added only 625 employees in Q4 of FY25—a clear indicator of cautious and selective hiring.
According to Milind Lakkad, chief HR officer at TCS, the company reportedly hired 40,000 graduates in 2020 and plans to increase that number further. However, that momentum has slowed significantly.
Wipro also reflects this trend. As per Saurabh Govil, CHRO at Wipro, the company hired 10,000 freshers in FY25, in line with its revised targets. This is a sharp decline from the 38,000 freshers it planned to onboard in FY23, and the 19,000 it hired the previous fiscal year, as per reports.
This signals that entry-level jobs are being redefined. Mohit Saxena, CTO and co-founder at InMobi, told AIM, “Essentially, AI has impacted the talent spectrum in two key ways. First, it has lowered the bar for becoming an average engineer.”
Today, even individuals without a formal engineering degree can write code. It may not be high-quality, but it is equivalent to what a weak engineer might produce.
“So, the threshold to enter the field has been lowered. At the same time, if you are a good engineer, AI has elevated your capabilities even further,” he added.
With the kind of assistance AI offers, a good engineer becomes exceptional. Hence, the gap between average and excellent has widened. “If you are caught in the middle, not leveraging AI and not evolving, you are in trouble,” Saxena warned.
The AI and Automation Wave
With the integration of generative AI, agentic AI systems, and no-code or low-code platforms, many of the tasks traditionally assigned to L1 engineers, such as basic code writing, testing, and routine ticket handling, are now being handled with minimal human intervention. For example, AI-driven platforms like GitHub Copilot, ChatGPT, and other code-assist tools can now write and optimise blocks of code with simple prompts.
“About 25% to 30% of development is going to happen through AI,” Neeti Sharma told AIM, echoing what several IT services CEOs have publicly acknowledged.
“We’re already seeing 30% productivity improvements, but it’s not just about code generation,” Muralidhar Krishnaprasad, president and CTO of Salesforce, said in an exclusive interview with AIM, adding that the company is also using AI for test case generation.
He further explained that AI can now generate these test cases automatically by understanding the code’s logic and user flows. This saves time and helps developers catch bugs earlier in the development process.
In fact, Gautam Goenka, VP of engineering and site head at UiPath, explained how new responsibilities are emerging with the rise of AI and agent-based systems. According to him, skills like prompt engineering, system understanding, and strong domain knowledge are becoming increasingly critical to building effective AI agents.
What’s more telling is how hiring metrics have evolved. “They will not look for people who can write lines of code…They look for people who can write prompts better. Prompt engineering is the new benchmark,” Sharma highlighted.
Meanwhile, in an interview with AIM, Alan Flower, executive VP, CTO and global head, AI and cloud native labs at HCLTech, revealed that business leaders worldwide perceive AI as a net productivity gain.“We have observed perhaps over a 60% productivity increase in certain areas,” he revealed.
Traditional IT Services Model Faces Its Own Reckoning
While global capability centres (GCCs) continue to expand their footprint and evolve into innovation hubs, traditional Indian IT firms—such as Infosys, TCS, and Wipro—appear to be on the back foot. With delayed fresher onboarding, limited salary hikes, and shrinking profit margins, their longstanding dependency on L1 roles has perhaps become a liability in today’s rapidly evolving tech landscape.
“Unfortunately, for the last three years, fresher engineers have not got the jobs they’re looking for from services companies,” Neeti Sharma, CEO at TeamLease Digital, told AIM.
This shift is also reflected in broader hiring trends. According to a TeamLease Digital survey, the hiring outlook for engineering graduates is expected to remain below pre-pandemic levels, with only 1.6 lakh freshers projected to find employment, compared to 2.3 lakh in FY23. This decline underscores the shrinking pipeline for traditional entry-level roles.
As Sharma mentioned, the trend was once largely a movement from IT services firms to GCCs. Now, the competition has intensified within the GCC ecosystem itself.
This trend signals more than just job shifts; it reveals a rising premium on domain depth and system-level thinking, and the obsolescence of roles that lack those competencies.
In this environment, GCCs are clearly raising the bar when it comes to talent acquisition. They are no longer content with just technical skills. Instead, they are looking for talent that blends engineering expertise, technological fluency, and domain understanding.
“The combination of engineering, technology, and domain is what GCCs look for. And I don’t see a reduction in terms of those requirements,” Sharma mentioned.
This shift means that today’s engineers are not just expected to code—they are expected to understand business logic, customer expectations, and domain-specific applications of their work. For many fresh graduates, this represents a significant leap; one that traditional academic structures often don’t prepare them for adequately.
Several forward-looking GCCs are actively embedding this mindset into their operating models. For instance, Anuj Khurana, CEO and co-founder of Anaptyss Inc, stated that the company has built an ecosystem of ‘Digital Entrepreneurs in Residence’, which allows it to prototype and implement industry-specific digital solutions. These are grounded in deep-tech capabilities and a profound understanding of the banking and financial services domain, exemplifying how domain-led innovation is becoming central to the GCC value proposition.
L1 Roles are Disappearing, But GCC Internship Pipelines are Expanding
One might assume that the only path to building a tech workforce is through fresher hiring. However, that’s not the case in the GCC world. Most centres now focus on structured internships and apprenticeships, treating them as long-term hiring pipelines with very high conversion rates.
He added that many companies compensate for this by investing in induction programmes and internal skill-building initiatives.
For example, as Kalavathi GV, executive director and head of the global development centre at Siemens Healthineers, pointed out, the company aims to close the gap between academia and industry by sending industry professionals to engage with academic institutions.
“They (GCCs) are quite choosy. They don’t go to all engineering colleges; they are very selective. [They will] either go to Tier 1, or to the IITs, IIITs of India,” Sharma added.
This means that internships are no longer a “good-to-have” for students; they are often the only route to entering premium tech careers. The GCCs use internships to evaluate behavioural readiness, soft skills, and domain adaptability well before considering full-time employment.
“We believe this is the only way to prepare the workforce—through deployment, education, and assessment all rolled into one,” Sharma explained, referring to degree-linked apprenticeships where candidates work, learn, and earn credits simultaneously.
Source – https://analyticsindiamag.com/ai-features/the-silent-collapse-of-entry-level-it-jobs-in-india/