IT Unemployment Hits 4-Year High as Sector Shifts to AI-Driven Roles

India’s IT industry is facing its toughest employment phase in four years, with the unemployment rate rising to 7.2% by October 2025, according to data from Instahyre. The net employment growth stood at just 1.8%, reflecting the ongoing slowdown in hiring across tech companies. Most firms, particularly mid-sized ones like Coforge, Hexaware, and Mphasis, have reduced headcounts, citing deal pipeline slowdowns and margin pressures. While the sector is showing signs of recovery from global headwinds, hiring remains highly selective, focusing on cloud, cybersecurity, and GenAI expertise.

Experts say the shift marks a clear end to the era of mass campus recruitment, with companies prioritising upskilling and niche digital capabilities. “Nearly 24% of IT employers reduced workforce this year, while 40% focused on targeted hiring in emerging tech areas,” said Sarbojit Mallick, Co-founder of Instahyre. Large players like TCS and Infosys also saw minimal or negative net additions, underscoring the broader industry recalibration.

According to TeamLease Digital, only 15–20% of STEM graduates secured IT jobs this year, with employability emerging as a key concern. Analysts at Greyhound Research note that even as mass layoffs ease, silent role eliminations and automation-led restructuring could continue, phasing out around 50,000 positions. Despite the downturn, IT leaders maintain that demand remains strong for candidates skilled in AI, cloud, and digital transformation technologies.

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