There have been concerns lately about AI disrupting IT sector jobs. However, the latest report by CLSA said that the data shows otherwise. It noted that hiring activity in India’s IT and software services sector increased 6.4% year-on-year (YoY) in February 2026. The report added that the BPO sector, which was expected to be hit the most by AI, continues to see strong growth in recruitment.
CLSA noted that hiring indicators across India and global markets show that the impact of AI on jobs has not yet materialised in a negative way. Instead, companies appear to be continuing with their hiring plans while also looking for specialised AI talent.
IT services hiring shows improvement
Data from the JobSpeak Index, which tracks job listings and recruiter searches on the Naukri.com platform, shows that hiring activity in the IT sector increased by 6.4% YoY in February following a muted January but comes after strong hiring growth recorded in November and December.
“New hiring targets are intact for next year and are similar to last year, implying no negative impact on hiring,” CLSA noted in its report. Instead, it added that “there is a greater need for specialised talent in AI-related roles.”
Companies such as Tata Consultancy Services Consultancy Services plan to hire around 40,000 employees, while Infosys expects to add 20,000 hires. Cognizant plans to recruit 20,000 employees in India and 2,000 in the US.
IT companies plans to hire specialised talent in AI
Infosys in its Investor AI Day 2026, said it is recruiting engineers with deep domain expertise in AI-related roles at salaries of up to Rs 21 lakh per annum.
Meanwhile, Tech Mahindra has categorised employees into different skill bands such as white, blue, brown and black belts as part of its reskilling initiatives to prepare its workforce for AI-led changes.
BPO sector hiring remains strong
CLSA also noted that BPO and IT-enabled services (ITES) sector, which many expected to be the first to face disruption from AI and generative AI, is currently witnessing strong hiring growth.
The BPO/ITES Jobspeak Index rose 21.7% year-on-year in February 2026, marking the 11th consecutive month of increased hiring activity.
CLSA noted that revenue growth in the BPO sector has largely moved in line with headcount additions, keeping revenue per employee relatively stable.
Revenue growth outpacing headcount
On the concern related to AI impacting the revenue of IT services industry, CLSA said, that revenue appears to be increasing faster than headcount.
“We find non- linearity between revenue and headcounts in the IT services space leading to increased revenue per employee despite lower utilisation levels and higher offshore efforts implying AI is leading to higher productivity across enterprises,” CLSA noted.
AI may help improve margins
Apart from productivity gains, analysts believe AI could also help improve operating margins for IT companies.
Higher productivity could allow companies to deliver more output with the same workforce. Some of these gains may be shared with clients, while companies could retain a portion to support margins.
“As yet, we do not see any major impact on operating margins of our covered companies,” CLSA said in its report
Conclusion
CLSA, through its report, highlighted that looking at the current hiring trends suggests that while AI is reshaping the nature of jobs in the technology sector, it has not yet led to widespread job losses. Instead, companies appear to be adapting by focusing on higher productivity and specialised AI skills.