Demand for entry-level roles in India's IT sector is set to soften further, while hiring for mid- to senior-level positions is expected to rise as companies prioritise specialised skills over volume hiring, job market experts said. The shift reflects a structural reset in the industry as artificial intelligence, Global Capability Centres (GCCs) and data centre expansion reshape hiring strategies.
The change comes as AI-led productivity gains accelerate automation of routine work, particularly tasks traditionally handled by fresh graduates. The release of new enterprise-grade AI tools has added to concerns around the long-term viability of entry-level roles in IT services.
Entry Hiring Slows
Hiring by IT services companies has slowed sharply at the entry level, said TeamLease Digital CEO Neha Sharma. "Fresher intake in IT services has dropped from 70–80% in 2021 to around 25% in 2025," she said.
A shift in campus hiring trends reflects the slowdown, according to data from Quess Corp. Large-scale campus hiring defined FY22–23 as companies absorbed freshers in bulk. FY24 marked a move towards controlled intake alongside higher automation, while FY25 has largely been restricted to selective hiring for niche skills.
'Mid-Level Dominates'
Mid-level roles now account for the bulk of IT hiring as entry-level positions gradually turn redundant, said Kapil Joshi, CEO of IT Staffing at Quess Corp. “Nearly 45% of total demand in the IT sector is for mid-level positions. This is largely due to rising AI-led automation and the expansion of GCCs and data centres, which require high-skill capabilities rather than large volumes of entry-level talent,” he said.
Around 50% of IT sector hiring in 2025 took place in GCCs, according to Quess Corp data, underscoring the shift towards captive centres handling complex, high-value work.
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Pay Premium Rises
A shortage of experienced talent is pushing up compensation for senior roles, Joshi said. "Companies are willing to pay a 30–40% premium for Level 3 talent because these skills are difficult to replace," he said.
For every ten professionals required for a Level 3 role, only six to eight candidates are available, creating sustained demand for senior talent and upward pressure on wages, he added.
'Disruption Is Different'
The current phase of disruption in IT feels fundamentally different from earlier cycles, said veteran market expert Ramesh Damani. “With AI, productivity gains are unprecedented. You now have companies with market capitalisations of hundreds of billions of dollars employing just a few thousand people. That shows how sharply output per employee has changed,” he said.
Entry-level displacement is likely as a result, Damani said. “Roles that earlier absorbed large numbers of graduates from technical institutes will shrink,” he said.
However, the expansion of GCCs in India will create alternative employment avenues, he added. "Many IT professionals will get absorbed there. New jobs will be created, even if they look very different. While there is pessimism around IT hiring, overall employment in the economy should remain healthy," Damani said.
'AI Compresses Work'
AI will reduce the number of people required for certain types of work, posing risks to revenues for some IT services firms, said Fractal Analytics co-founder and CEO Shrikanth Velamakanni. "AI will reduce the number of people required for specific tasks, and that does pose a risk," he said.
Short-term AI gains should not be overstated, Velamakanni said. "AI's capabilities are often overestimated in the short term and underestimated in the long term," he said.
While AI tools work well with unstructured data, large IT firms manage complex transformations involving multiple software systems, data pipelines, user behaviour and stakeholder coordination, making full automation unrealistic for now, he said.
Still, IT services firms must adapt their business models, Velamakanni added. “My short-term outlook isn't threatened by AI tools, but the mid- to long-term definitely is. IT services companies have to rethink their transformation strategy in the age of AI,” he said.
Skills Gap Widens
India's education ecosystem is still catching up with the pace of AI adoption, said Sharma. “Teaching end-to-end AI skills requires trained professors, and that itself is a challenge because the technology is evolving so fast,” she said.
While premier institutions such as the IITs are investing in AI research and incubation, faster re-skilling across the broader workforce is critical, she added. “We talk about a demographic dividend, but it is really a volume dividend. Without the right skills, we risk missing the opportunity,” Sharma said.
The IT sector is not shrinking but changing rapidly, industry leaders said. While entry-level roles may continue to decline, demand for experienced, high-skill talent is set to rise as India's technology ecosystem shifts towards more complex, value-driven work.
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