Hiring landscape slowly changing in Indian IT industry

Some of the top Indian IT companies have announced their results, while many others will follow suit in the coming weeks. While the performance of these IT firms shows status quo in the demand environment, changes are being seen in the hiring landscape. Companies like TCS cut their headcount by 11,000 during the third quarter of the current financial year, while there was a marginal headcount reduction at HCLTech. Amid these changes, Infosys showed that its headcount had grown by over 5,000 during the period under review. Such divergence shows that the project flow and execution in the AI space are not the same for all. Companies with large business legacies are facing the heat as AI-led automation is eating into the revenues of such entities. In turn, many job roles are becoming redundant for them. On the other hand, companies with higher digital business are shifting to the AI world better. These developments apart, IT companies are also showing a divergent trend as regards fresher hiring. Some companies have slowed down the fresher intake, while many others are hiring fresh graduates as per their previous plans.

Such divergence shows their approach to the bench, which is the number of reserved employees that an IT firm maintains in anticipation of future projects. Experts are of the opinion that some companies are cutting down their bench strength as cost pressure is increasing due to AI-led automation. That is the reason that they are going slow in campus hiring. In addition to the hiring trend, Q3 results indicate that there is minimal impact of H1B visa restriction rules on earnings of top IT firms. Neither the share of the US revenue nor the growth rate in the North American region have been impacted during Q3 of FY26. Though there were instances where employees of some companies have been sent back by the US authorities, it, however, has not resulted in disruption in workflow. Therefore, it is evidently clear that Indian IT firms can manage projects better in the US despite the difficulty in sending professionals to the North American region. Overall, Indian IT companies’ employee pyramid seems to be changing. More number of professionals with emerging technology skillsets are being sought these days. Many traditional areas of technology like testing, coding and the likes are being replaced through agentic AI tools.

In this context, companies are seeking that kind of workforce trained in the new areas. Also, given the uncertainty, most IT firms are not keen to hire in large numbers. Demand environment across the United States and Europe is yet to recover fully despite the strong GDP growth rate reported by the former in the last quarter. This is directly because of the geopolitical uncertainty and Trump tariffs. Businesses will not commit any sort of heavy investment unless they are sure of getting viable returns. There is no denying that geopolitical certainty plays a large role in this aspect. Going ahead, demand revival will be key to the hiring landscape. IT firms will recruit in large numbers when the demand in the enterprise space increases. Some companies have indicated that discretionary spending in BFSI is showing signs of revival. If it happens, there is a probability of improvement in performance. Similarly, manufacturing and energy are also showing some momentum, though other important verticals like retail, hi-tech and others are yet to show any meaningful revival. Till that happens, hiring will be at a slow pace. Another critical factor-adoption of AI in enterprise-will also determine the quantum of technology professionals who would be required in the long run. For the time being, AI adoption is not leading to mass scale layoffs for sure.