India’s IT services industry has seen a slowdown in hiring since the start of the second quarter, a trend that staffing firms expect to continue due to global economic uncertainty, rising U.S. tariffs and weak discretionary spending.According to ET, data from Teamlease shows that overall employment across India’s $283 billion outsourcing sector fell by 10% between July and August. Demand for legacy technology jobs fell by 2% to 3% in the current quarter ending September 30, but roles in artificial intelligence (AI), machine learning (ML), cloud, data, and cybersecurity remain strong. In contrast, employee numbers rose 3% year-on-year in the June quarter, with a net addition of around 9,000.According to ET, the top six IT companies, including Tata Consultancy Services (TCS) and Infosys, created just over 3,800 new jobs in the June quarter, down nearly 72% from the March quarter. According to data from Xpheno, the number of active job openings for legacy technology jobs fell to 43,000 at the end of August, down 9% from July, 24% from a year ago, and 41% from September 2022.“Demand is rapidly approaching its lowest level in three years, but there are no clear signs of an improvement anytime soon,” Xpheno co-founder Kamal Karanth said in a statement to ET.Neeti Sharma, CEO of Teamlease Digital, said the difference in hiring trends is clear: “Enterprises are hiring more for cloud, data, cybersecurity, and AI/ML coding skills, but not traditional technology stacks. Therefore, hiring is decreasing.”Kapil Joshi, CEO of IT Staffing at Quess Corp, highlighted that demand was down nearly 20% in August compared to July. He attributed this to “macro factors such as additional U.S. tariffs and global economic uncertainty that are making companies cautious about hiring plans.”The September quarter is expected to end with weaker-than-expected results, and the October-December quarter may remain weak due to public holidays in India and public holidays in the United States and Europe.Still, demand for emerging technology roles is skyrocketing. Teamlease pointed out that India needs more than 500,000 professionals with AI skills, but there is only one qualified engineer for every 10 open roles, leading to significant salary increases, especially in the GenAI and cybersecurity fields.
