India’s IT hiring drops 72% as AI drives $283Bn outsourcing sector shift
MAHARASHTRA, INDIA — India’s six largest IT firms added just 3,847 jobs in quarter two of 2025—a dramatic 72% drop from the previous quarter—as AI-driven efficiencies disrupt traditional hiring models.
The Times of India reported that Tata Consultancy Services (TCS) and Infosys expanded their workforces marginally, while HCLTech, Wipro, Tech Mahindra, and LTIMindtree collectively cut 1,423 positions, signaling a sector-wide shift toward automation over mass recruitment.
TCS and Infosys recently ranked #8 and #11, respectively, while Wipro, Tech Mahindra, and HCLTech ranked #3, #9, and #12 in the OA500 2025, an objective index of the world’s top 500 outsourcing companies.
AI disruption decimates traditional IT hiring models
This stark reversal reflects what Randstad Digital’s Managing Director, Milind Shah, calls “strategic recalibration” through AI and cloud adoption. According to Teamlease data, entry-level hiring is now 50% below pre-pandemic levels.
“The current stagnancy in headcount additions potentially reflects a strategic recalibration. This shift is driven by the widespread adoption of AI, automation and cloud-based architectures, which have significantly reshaped hiring trends across the IT industry,” Shah told The Times of India.
Revenue growth no longer drives proportional hiring, as LTIMindtree Chief Executive Officer (CEO) Venugopal Lambu confirmed, saying, “Over the last few quarters, when we added revenue, the headcount has not necessarily increased. So, there is a correlation or a non-linearity, but it is too early to call out to what extent it will happen.”
The sector now prioritizes upskilling existing staff over expansion, with AI automation handling routine technical work.
This paradigm shift has reduced total industry employment to 1.625 million, still below the June 2022 peak of 1.658 million, despite recent revenue gains.
Cautious recovery emerges amid global economic headwinds
The initial six-monthly increase in employment after three years lends credence to the current performance, with 14,000 and 32,000 job losses estimated in 2024 and 2023, respectively.
Nevertheless, companies are cautious when it comes to horizontal recruiting due to the dull global business environment and mounting tariffs, as well as client expenditure reductions.
The gap that exists between the announcements of hiring freshers and the actual process of bringing them on board continues, as Shah comments on selective recruiting in relation to the core business outlook.
Companies now invest in digital architecture and development programs rather than expanding the workforce. This explains why workforce numbers remain depressed despite the sector crossing $283 billion in revenue, a clear indicator that automation efficiencies are permanently reshaping India’s IT employment pyramid.
