The numbers speak for themselves. 

NASSCOM data show that the sector added around 450,000 net jobs in 2021-22, before falling to 290,000 in 2022-23, 60,000 in 2023-24, and 126,000 in 2024-25. Net additions were approximately 135,000 in 2025-26. This is about 70% lower than the peak in 2021-22.

The falling figures are worrisome amid concerns over unemployment and under-employment.

Falling Figures

Earlier this year, reports highlighted that several students passing out of marquee universities and colleges, including the Indian Institutes of Technology (IITs), were left in the lurch after companies revoked job offers provided to them on campus. Big names like Oracle and SuperAGI allegedly did not go through with their offers, with the most commonly cited reasons being internal restructuring and AI adoption.

Montek Singh Ahluwalia, former Deputy Chairman of the erstwhile Planning Commission, said that the rapid pace of technological change could have a significant impact on employment in India.

“A large gamut of software-type activity, which did very well and generated employment, is now going to be contained,” Ahluwalia said.

From Headcount To Productivity

What has caught the attention of policymakers is this: The IT companies which have managed to increase their profits and overall turnover are now focusing on expansion with less manpower.

This trend is becoming more and more pronounced.

A large gamut of software-type activity, which did very well and generated employment, is now going to be contained

– Montek Singh Ahluwalia, former Deputy Chairman of the erstwhile Planning Commission

In 2025-26, Tata Consultancy Services (TCS) reported a turnover of ₹2.67 lakh crore, up from ₹2.55 lakh crore in the previous year, even as its employee strength declined from 607,979 as of March 31, 2025, to 584,519 as of March 31, 2026. 

Bengaluru-based Infosys Ltd, meanwhile, saw its turnover rise to ₹1.79 lakh crore in FY2025-26 from ₹1.63 lakh crore a year earlier, a growth of 9.6%, while its employee strength increased by only 1.6% to 3,28,594 from 3,23,578.

Wipro Ltd and HCLTech Ltd also reflect the broader shift, although the trend is not uniform across companies. Wipro reported a turnover of around ₹92,624 crore in FY2025-26, up from ₹89,088 crore in the previous year, while its employee strength increased from 2,34,054 to 2,46,990. HCLTech, meanwhile, reported a turnover of ₹1,30,144 crore in FY2025-26, up 11.2% from ₹1,17,055 crore in FY2024-25, while its employee strength stood at around 2.27 lakh at the end of March 2026.

The Secretariat reached out to Wipro and HCLTech for their views on how AI is influencing hiring, workforce planning and productivity, but neither company had responded at the time of publication.

Parishrut Jassal, Founder of GovernAI, said this represents a fundamental change in how India’s technology sector scales. GovernAI is an AI-focused company that helps organisations leverage artificial intelligence to improve business processes, productivity, and decision-making.

“The Indian IT industry is undergoing a structural migration from linear, headcount-led scaling to non-linear, productivity-led delivery,” Jassal said, adding that the signs of this transition are visible in recent financial disclosures, where aggregate enterprise revenues continue to grow or stabilise while total employee headcounts flatten or decline.

The Disruptor

AI is playing a key role in this transition. 

The Indian IT industry is undergoing a structural migration

– Parishrut Jassal, Founder, GovernAI

Coding assistants, AI agents, and automated testing tools can help streamline software development and other IT services-related tasks, enabling businesses to scale without the corresponding growth in workforce. 

They can speed up software development and other IT services-related activities, allowing businesses to expand without expanding the workforce at the same rate. And this would naturally make the companies richer as they also save millions on human resource expenditure.

This is also changing the way companies approach workforce planning, with productivity increasingly becoming a factor in determining hiring requirements. 

Jaspreet Singh, Partner, Grant Thornton Bharat LLP, said, “AI is weakening the traditional link between business growth and headcount growth. Companies can now handle higher volumes with smaller teams by using AI to automate repetitive work and improve productivity.”

AI is weakening the traditional link between business growth and headcount growth

– Jaspreet Singh, Partner, Grant Thornton Bharat LLP

“There is some short-term impact, particularly where AI and automation can take over repetitive, structured work. We are seeing organisations look at how the same project can be delivered with smaller teams or with people spending less time on routine tasks. This is most visible in areas such as basic software development, testing, documentation, data preparation, service desk and some repetitive business-process work,” Dhrubabrata Ghosh Dastidar, Managing Director, Protiviti Member Firm for India, told The Secretariat.

However, this may not necessarily imply large-scale job losses. Instead, firms can gain in productivity so that they need the same (or fewer) workers to accomplish the same tasks.

There is some short-term impact, particularly where AI and automation can take over repetitive, structured work. We are seeing organisations look at how the same project can be delivered with smaller teams or with people spending less time on routine tasks

– Dhrubabrata Ghosh Dastidar, Managing Director, Protiviti Member Firm for India

Rohan Sylvester, Talent Strategy Advisor at employment and hiring firm Indeed, said AI-driven productivity is changing the composition of hiring rather than eliminating the need for workers altogether. “Productivity gains are not eliminating hiring needs altogether. Instead, they are changing where hiring happens: routine work can be streamlined, while demand is growing for people who can implement AI, work alongside it, and help businesses translate efficiency gains into business growth,” he said.

Indeed's research reveals that AI has already made its way into the recruitment process, with 46% of employers using automated talent sourcing and screening and 5% not using AI-driven hiring tools.

Demand is growing for people who can implement AI, work alongside it, and help businesses translate efficiency gains into business growth

– Rohan Sylvester, Talent Strategy Advisor, Indeed

Amneet Kaur Sahdra, Founder of Catalyze, a career-readiness and capability-development platform, said campus recruitment is likely to increasingly focus on capabilities beyond conventional academic qualifications. “Campus hiring will increasingly move away from testing only knowledge and qualifications towards assessing learning agility, structured thinking, communication, judgement, and the ability to work intelligently with technology.”

This means that the workforce strength is not measured in terms of headcount, but rather the output that the employee can produce using technology.

Campus hiring will increasingly move away from testing only knowledge and qualifications

– Amneet Kaur Sahdra, Founder, Catalyze

Atul Tiwari, former Secretary, Ministry of Skill Development and Entrepreneurship, said the bigger challenge for India would be ensuring that its workforce adapts to the changing nature of work. “The biggest threat as of now as a country, I would say, is: how do we preserve the employment of so many people? That can only happen in the changed circumstances if they are aware of the new systems.”

Worrisome Trend

The trend is worrisome as about 8-9 million graduates are added into the workforce every year. India needs to create an ecosystem to absorb the fresh graduates. “More and more young Indians are today getting degrees with the hope of improving their future and scope of livelihood and this is something the policymakers must take note of,” a senior professor at Jadavpur University in Kolkata said. The public as well as the private sector need to do their bit.

The pressure is not limited to India’s domestic job market. Overseas technology markets, particularly the US, have traditionally been an important avenue for Indian technology professionals. 

Overseas Tech Market

Indian origin techies like Sundar Pichai, Satya Nadella, Arvind Krishna and Shantanu Narayen are big names the world over.

But data from the United States Citizenship and Immigration Services (USCIS) now shows that Indian-born workers accounted for 71% of approved H-1B visa petitions in 2024. Tighter immigration policies and greater localisation of hiring could make overseas opportunities more competitive for Indian technology professionals, even as domestic IT hiring becomes increasingly selective.

Indian techies, who have been part of Silicon Valley and powered the IT sector the world over, are no longer in focus. The use of AI along with automation, besides other geopolitical issues, including stricter immigration norms with the rise in a protectionist trend, is adding to the problem. The problem has become even more pronounced under the Donald Trump administration.

The biggest threat as of now, as a country, I would say, is: how do we preserve the employment of so many people?

– Atul Tiwari, former Secretary, Ministry of Skill Development and Entrepreneurship

While many jobs are likely to open up for Indians as New Delhi looks to ink bilateral trade deals, the overarching challenge of job uncertainty is here to stay, say experts.

What India needs is a well-thought-out policy which will boost employment generation. “It is not only about employment; what needs to be looked at with seriousness is to be able to provide the right jobs, as under-employment is gradually turning out to be a major problem,” the JU professor said.