As AI reshapes entry-level jobs, India's IT industry grapples with developing future talent

India's IT sector is experiencing a decline in the hiring of fresh graduates as artificial intelligence (AI) reshapes the skills employers seek. This shift has raised concerns about a potential shortage of experienced workers in the future unless companies and universities take steps to better develop young talent. Final-year engineering student Arpita Dayama, preparing for campus recruitment, notes that strong grades from prestigious institutions like the Indian Institute of Technology (IIT) Bombay are no longer sufficient to stand out.

Employers now demand practical skills, including data science projects and work involving agentic artificial intelligence. Industry experts warn that the traditional model of hiring graduates in bulk and developing them over time is no longer effective, as AI takes over routine coding tasks. Tata Consultancy Services (TCS) and Infosys have reduced their hiring of fresh graduates, with TCS's intake in financial year 2026 being less than half of its level four years ago.

Infosys hired about 80% fewer fresh graduates in financial year 2025 than three years earlier. To adapt, companies are offering in-house training and collaborating more closely with universities. Academics argue that universities must prepare students earlier by focusing on problem-solving, decision-making, and broader technical skills.

Multinational companies are also moving beyond routine back-office work to more complex roles involving innovation and specialized industry knowledge. Workforce advisors highlight the need for companies to invest in fresh graduates to develop the next generation of skilled workers, as AI significantly impacts various tasks and areas such as AI, cybersecurity, and process improvement.