IT hiring falls to 28-month low, but demand for AI talent remains strong

The technology recruitment landscape in India is undergoing a significant transformation. Companies are moving away from the aggressive hiring practices that characterized the post-pandemic phase and are now adopting a more cautious, demand-oriented strategy for workforce management. Recent data from talent intelligence platform Xpheno reveals that active job openings in the tech sector have plummeted to a 28-month low, with only 93,000 positions available in early June, a decrease from 119,000 in March. This represents a 14% drop from the previous month and a 17% decline compared to June 2025. Kamal Karanth, co-founder of Xpheno, notes that this shift reflects the Indian tech industry's heightened sensitivity to market fluctuations, influenced by global geopolitical and economic factors. As major IT firms begin to realize that revenue growth is increasingly independent of workforce size—especially with the integration of artificial intelligence across various operations—the need for vast recruitment is diminishing. For instance, Tata Consultancy Services (TCS) recently announced it would offer 25,000 positions to fresh graduates, while Infosys plans to hire around 20,000 this fiscal year, figures significantly lower than previous years when TCS recruited over 40,000 annually. The data from Xpheno highlights a 44% year-on-year decline in entry-level job openings and a staggering 67% drop in senior roles. However, recruiters suggest that this decline is not merely a result of reduced demand. Instead, companies are leaning towards just-in-time hiring models, minimizing their large employee pools. Careernet reports that campus hiring is still 30-35% lower than historical averages due to several factors: ongoing global economic uncertainty affecting tech investment, increased automation through AI, and a normalization of hiring after the spikes of 2021 and 2022. Neelabh Shukla, Chief Business Officer at Careernet, emphasizes that the reduced hiring activity signifies a recalibration of demand rather than a widespread downturn in the tech sector. Notably, demand from IT services firms has decreased by 16% month-on-month, resulting in approximately 36,000 available positions. In contrast, global capability centers (GCCs) have shown more resilience, with a slight decrease in openings month-on-month but a 31% increase compared to the previous year. Industry experts indicate a broader transition from expansive hiring to a more strategic approach. Sashi Kumar, Managing Director of Indeed India, explains that employers are now focusing on filling key roles that enhance capabilities rather than merely increasing headcount. While recruitment in certain areas like IT systems and data analytics has slowed, there has been a 20% year-on-year increase in hiring for IT infrastructure and support roles. Employers are prioritizing specialized skills crucial for AI deployment and infrastructure modernization, leading to a more focused tech job market. Despite the overall slowdown, technology job postings have increased by 8.2% year-on-year as of late May, even as general job postings fell by 1.9%. The demand for emerging technology skills such as AI, machine learning, cloud computing, and cybersecurity remains robust, though there are significant challenges in finding qualified candidates. Karanth points out that part of the slowdown can be attributed to uncertainties surrounding the H-1B visa program in the United States, which plays a crucial role in the Indian tech sector's ability to access markets and deliver projects. Looking ahead, recruiters do not foresee a prolonged period of diminished hiring activity. While mass recruitment cycles may not return, there is an expectation of a rebound for entry-level positions within IT services as concerns about AI investment and returns evolve. For now, the approach to recruitment is shifting towards a more strategic focus, prioritizing specialized talent that can drive immediate business results.