IT firms defer salary hikes amid global slowdown, AI skill demand
GUJARAT, INDIA — The global IT sector is hitting the brakes on employee salary hikes as economic uncertainties and shifting technological demands reshape the industry.
Companies are delaying increments by up to six months or tying them to October rollouts—a rare move signaling caution amid dwindling export orders and rising pressure to upskill in AI and cybersecurity.
Export slowdown and rising costs squeeze margins
Gaurav Barot, Chief Executive Officer (CEO) of a leading tech firm, said, “Most foreign clients adopted a wait-and-watch approach this year, leading to a muted increment season.”
“The IT sector is going through challenging times,” Barot stressed, emphasizing the pressures and challenges that the sector faces.
A director at an anonymous IT company confirmed that order volumes have dropped significantly, with United States clients scaling back due to geopolitical tensions and tariff wars.
Tejinder Oberoi of Cygnet Infotech added that salary costs in offshore outsourcing firms have surged from 45% to 70% of revenue in five years, squeezing margins.
With stiff client negotiations and rising operational costs, companies are forced to defer or minimize raises—a stark shift from previous years’ growth trends.
AI and cybersecurity skills command premium pay
As traditional IT services face slowdowns, demand for expertise in AI, cloud computing, and cybersecurity is skyrocketing.
Former president of GESIA IT Association, Nirav Shah said, “There’s high demand for AI, cloud and cybersecurity expertise in the domestic market. Those who are ahead of the curve are still landing great opportunities — others need to catch up.”
Companies are now explicitly urging employees to upskill, aligning with rapid industry shifts toward automation and cost-cutting tech solutions.
Oberoi highlighted that AI adoption across sectors is driving firms to prioritize specialized talent over general IT roles.
He stressed that adapting to newer technologies is imperative, noting that clients are aggressively experimenting with tech to reduce expenses.
This trend is reshaping hiring strategies, with firms willing to pay premiums for niche skills while freezing or reducing raises for conventional roles, further widening the gap between high-demand and stagnant job segments.
