IT services industry is going through a period of transition. With accelerating adoption of generative AI, decades-old business model is facing challenges. Traditionally, global IT outsourcing industry has been following the T&M (time & material) model in which the client is billed based on number of hours put in by the technical resource or engineer. Such revenue model is dependent on number of human resources deployed in a project. Now, this fundamental aspect of billing is getting changed.

Artificial Intelligence (AI)-powered solutions and platforms are now able to automate several repetitive tasks, making entry-level engineers redundant. Not only that, AI is able to do more with lesser number of engineers. It means the sector requires lesser number of technology professionals as compared to pre-pandemic years. Such fundamental change is influencing IT hiring to a great extent.

Of course, global demand scenario; macroeconomic issues and individual company’s financial planning are the factors impacting IT hiring but these factors always have a play. Now, the limiting factor is the AI-driven efficiency. That is the reason IT hiring has been muted in the last three years. However, as the AI wave stabilises with a bit of earnings growth coming back for Indian IT services firms, last year saw a jump in total hiring of IT professionals.

Hiring market recovered with 16 per cent jump in demand for IT professionals in 2025. A total demand of 1.8 million roles was seen in 2025, according to a Quess Corp Report. But most of the demand has come from GCCs (Global Capability Centres) than IT services companies. Slowly and steadily, India is emerging as a GCC powerhouse. Global companies are preferring to set up technology centres in India because of the tech talent availability.

With around 1,700 GCCs now, which is going to reach 3,000 by 2030; the country is powering global firms in their digital transformation journey. And most of the tech hiring is being done by these GCCs. The report said, GCCs boosted their share of India’s IT hiring market to around 27 per cent of total demand in 2025, up from around 15 per cent last year. The report noted that while product and SaaS firms expanded hiring selectively in 2025, IT services and consulting recorded modest growth. Startup hiring, however, declined to low single-digit levels last year.

As we enter 2026, things may not be very different from last year. According to a report by staffing firm- Xpheno, tech hiring remained sluggish through December 2025 and entered the New Year with little sign of recovery. The report said that the current demand is nearly 60 per cent lower than the peak seen in early 2022, when there were more than 260,000 active openings in the sector.

The report, here, also pointed out that GGCs remained the bright spot with 7 per cent rise in job openings. In the coming months, things will depend more on the macroeconomic situations. If the global supply chain stabilises from Trump tariffs, verticals like manufacturing, retail, & auto will perform well. This will, in turn, push up demand for more IT professionals for the sector. However, hiring landscape is unlikely to come back to their usual growth curve in coming years.

In that way, GenAI-led developments should be seen as a watershed movement in the global technology industry. Increasingly, more work will be done through Agentic AI tools than engineers. Demand for professionals will be more in executing more complex jobs than doing the routine stuff. All-in-all, IT hiring outlook remains stable when compared with last year but has already shifted in a different direction with the advent of AI wave.