Inside India newsletter: AI is exposing cracks in India’s growth story as it hits high-paying IT jobs
India's IT sector is experiencing a slowdown in hiring due to the increasing adoption of AI, leading to reduced entry-level job opportunities and a shift toward productivity-led growth. Major firms like Tata Consultancy Services are significantly cutting graduate recruitment, reflecting a broader structural shift in the industry. With manufacturing and agriculture still underperforming in job creation, experts warn that India may struggle to generate enough quality employment to sustain inclusive economic growth.
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"Headcount rationalisation is happening across the board," said Sushovon Nayak, senior research analyst, at Mumbai-based Anand Rathi Institutional Equities, adding that net hiring by India's top five IT companies dropped by around 7,000 in the financial year ended March 2026.According to local media reports, India's largest IT firm, Tata Consultancy Services, which laid off 12,000 last July, has plans to hire just 25,000 fresh graduates this year compared to an average of 40,000 new hires over the last three years.For the last five years, gross hiring of IT firms averaged around 230,000, but in the financial year ending in March 2026, they added around 170,000, according to Nayak.Others in the industry also see a clear shift in India's IT industry, which is moving away from volume hires.
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