IT companies in India appear to be slowing down hiring as they increasingly invest in artificial intelligence, which is seen as the future of technology. This trend is expected to persist in the near term. Many are attributing this decline, which is as low as 2-3 per cent, to economic uncertainties around the world due to Trump’s tariff on India, which currently stands at 50 per cent, artificial intelligence and other contributing factors.
According to a report by ET, outsourcing firms have recorded a 10 per cent dip in overall hiring between July and August. Legacy tech jobs, in the present quarter, saw a decline of 2-3 per cent, even as demand for specialised skills, AI-related positions, and remote roles either surged or remained stable.
The outlet further reported that only 3,800 employees were hired by six IT companies, including Tata Consultancy Services (TCS) and Infosys, during this quarter. This marks a sharp decline of nearly 72% compared to the March quarter.
There were only 43,000 openings for tech roles by the end of August, which is 24 per cent lower when compared to the same period in 2024. When compared with September 2022 data, it reflects a steep 41% drop, according to Xpheno’s findings cited by ET.
Across sectors, including product firms, startups, global capability centres (GCCs), and non-tech companies, there were over one lakh active tech job openings. This is 1 per cent lower than August and 24 per cent below the previous year’s figures.
Overall hiring demand to remain sluggish
As per several platforms tracking active tech job roles, the overall hiring demand over the last three months has been sluggish, with active demand falling by 49 per cent overall.
Kamal Karanth, co-founder of Xpheno, told ET that this is among the lowest demand levels seen in the past three years, adding that the data doesn’t indicate an “immediate turnaround”.
Quess Corp CEO Kapil Joshi, as per the ET report, also pointed out that demand noticeably dropped by 20% in August compared to July. He predicted that the remaining months of the year would follow a similar pattern, with hiring expected to remain soft through September and taper during the festive seasons of October, November, and December.
Over the last two to three quarters, tech service providers have mainly focused on backfilling positions due to attrition and maintaining already high utilisation rates rather than expanding aggressively.