Features Mr. Shubh Kumar graduated from IIT Patna, one of India’s prestigious engineering institutes. Patna Institute of Technology attracts millions of applicants but only admits 18,000 undergraduates.
Google CEO Sundar Pichai and IBM President Arvind Krishna are both IIT graduates, and employers are looking for IIT students. New graduates are generally optimistic that earning a degree from one of 23 institutions will be a great start to their career.
However, that dream did not come true for Kumar. A few weeks ago, he was scheduled to join a local startup as a software development engineer, but the company canceled his offer, citing “significant consolidation” and “extremely challenging financial conditions.”
He was upset when he heard the news.
“I was ready to start,” Kumar said. “Right now I’m just trying to go back to zero and stay confident,” he said. register.
Mr. Kumar’s story is familiar on Indian university campuses, where information technology students increasingly feel that employers are not interested in hiring early-career talent.
The country’s top five IT services companies, once a common place for young engineers to hire, hired about 100,000 graduates in FY21, but are projected to hire only 70,000 by FY26.
Other companies are also hiring fewer early-career IT professionals. Graduate hiring by Indian technology companies peaked at 600,000 in FY21-22, before falling to 150,000 in both 2023 and 2024, according to data from technology staffing and HR services firm Team Lease.
More than half of the 23 Indian Institutes of Technology (IITs) saw graduate placement rates fall by more than 10 per cent between 2021-22 and 2023-24, according to the ‘Subsidy Demand’ report. [PDF] Prepared for the Ministry of Higher Education, India.
The parliamentary standing committee said the decline was “unusual,” noting that other universities have seen similar trends in which average starting salaries have declined. The committee called on the Ministry of Higher Education to find ways to increase students’ employability.
Impact of AI
Experts see a structural shift in India’s IT sector, with AI and other forms of automation reducing the need for entry-level coding and support roles.
“Mundane rule-based roles such as manual testing, basic application support, and low-level coding are the most affected,” said Neeti Sharma, CEO of TeamLease. “Generation tools provide these outputs faster and reduce the need for large amounts of fresh intake.”
This trend extends beyond India. Globally, the number of entry-level technology jobs has declined by 35% since January 2024, said Milind Shah, managing director at Randstad Digital India.
Mark Einstein, research director at Counterpoint Research, added that countries with heavy outsourcing, like India, will feel the impact of this change the most. “It is already clear that entry-level roles are particularly vulnerable,” he said.
While overall hiring for entry-level IT professionals is declining, Randstad’s 2025 Talent Trends Report found that demand for AI/ML roles has soared by 39%.
This change can be seen on campus as well. “We are excited to see students from a variety of disciplines take up AI/ML roles,” said Arpan Kher, Head Professor, Yaldi School of AI and Department of Management Studies, Delhi Technological University. “The recent curriculum review has made AI courses compulsory for all B.Tech and M.Tech programs.”
GCC is the new offshoring
Global capability centers (GCCs) – a term for offshore technology teams set up by multinational companies to serve their global needs – are a major source of IT talent in India.
India is home to more than half of the world’s Gulf states, and analysts expect it to become a $100 billion industry by 2030 with more than 2,200 centers and a total of 2.8 million jobs.
But for now, GCC is not interested in graduates as it needs professionals who are ready to drive the existing IT setup.
The rise of the GCC is changing the tech jobs available in India.
“India’s IT sector is moving away from mass outsourcing to an innovation-driven talent ecosystem,” said Abhijit Bhaduri, a talent expert.
But for newcomers, this shift can feel exclusionary. “With a few exceptions, GCC is taking baby steps in terms of new hires,” admits Mohua Sengupta, known as GCC and IT services leader.
Campuses are adapting to this new reality by teaching more in-demand skills.
“Last year, not a single graduate chose a traditional software engineering role,” says Shashwat Bhardwaj, AI Graduate School PG Placement Coordinator, IIT Delhi. “All of our students have gone on to positions such as AI engineers, data scientists, and quantitative roles.” GCC and startups demand niche skills, forcing candidates to recalibrate their career paths.
Saksham Rathi, a student at IIT Bombay CSE, says, “With traditional IT jobs dwindling, many of us are now looking at AI/ML and product-based roles.”
Reinventing the pipeline
The slowdown in new graduate recruitment reveals the growing mismatch between education and industry.
“The gulf between what is taught and what is required is widening,” says Dr. Y. Shekhar, faculty member and director of the Center for Digital Enterprise at the Indian Institute of Management, Udaipur University. “Soft skills trump hard skills. Those who can collaborate, communicate and adapt will survive.”
Companies are responding by overhauling the way they train new employees.
Tech Mahindra, for example, takes a “skills-first perspective to develop talent for high-value, high-potential roles,” said Richard Lobo, the company’s chief human resources officer. An AI-powered Upskilling-as-a-Service (UaaS) platform maps fresher aspirations and skill profiles to evolving business needs, ensuring alignment from day one.
India’s technology industry lobby group NASSCOM maintains that the country’s ability to scale and upskill its digital workforce remains core to its competitiveness.
“The IT sector’s historical reliance on a large influx of new graduates is being fundamentally reshaped,” said Abhimanyu Saxena, co-founder of edtech company Scaler. While entry-level roles are evolving, Saxena believes “the size of the pie is growing” for people with the right skills.
As Delhi Technological University’s Bhardwaj points out, one way for academia to adapt is to give students more hands-on projects and access to advanced computing tools.
Shubh Kumar eventually found a job, but said it was much more difficult to find than the campus recruitment process that led to the startup offering him the job.
“Off campus, it’s all about your efforts,” he said. “This process requires more patience.”
However, the long-term outlook still points to expansion. NASSCOM predicts that India’s technology workforce will double to 10 million by 2030, with AI alone creating 2-3 million jobs.
But as TeamLease’s Sharma warns, realizing the strengths of this pipeline will depend on how effectively the system adapts. “India’s vast STEM achievements and growing GCC base are an advantage, but only if we incorporate AI, data and cloud skills into education and industry partnerships,” she says.
Professor Kar sees the change from “quantity to value” as an evolution. “Students are still being placed,” he observed, noting that talent has long been concentrated in the service sector. “As India’s manufacturing and core sectors expand, new avenues will open up.” ®
