Campushiring of engineering graduates has been moving at a snail’s pace in recent years. One of the major employers, which are Indian IT firms- are altogether missing or hiring very low numbers. According to HR consultancy firm- Xpheno, fresher hiring in India’s IT sector has fallen froma peak of 600,000 in FY22 to about 120,000 in FY25. Many analysts see no change in the overall numbers for FY26, which will be known in a few weeks.
Such tepid hiring trend is driven by a combination of factors. Firstly, demand environment in the IT industry remains subdued. With geopolitical situation remaining volatile owing to Russia-Ukraine war, Iran versus US & Israel conflict and Trump tariffs; enterprises are cautious in their technology spend since last financial year.
Especially, the US government’s decision to impose tariffs on its trading partners has created an uncertainty in several sectors. Though deal pipeline remained robust for most Indian IT companies, the implementation rate of those projects was low. That is the reason that freshers are not required in large numbers as they used to be in earlier years. Second and the most important change has been driven by adoption of AI (artificial intelligence)-powered solutions in the industry.
Many of the entry-level works are getting automated through agentic AI tools. It means companies no longer require as many fresh engineering graduates as compared to previous years. Such fundamental shift is driving the recruitment trend in engineering colleges. For three decades, Indian IT industry’s operational model has been focussed heavily on hiring of new engineering graduates from college campuses.
In a project, freshers and junior employees with 2-3 years of experience comprise the bulk of the man power. Such employee pyramid has helped IT services companies to keep their employee cost lower as entry level salaries remain low for the industry as whole. However, such established operating model is going through a shift as of now. Many L1 & L2 work loads are being handled by agentic AI tools in recent quarters.
In a way, these AI tools should be seen as responsible for replacing new engineering graduates in India for now. Do these factors make engineering graduates redundant in the evolving landscape? Answer to this question is still not known to the industry. Because Accenture- world’s biggest IT services & consulting company- recently added headcount by hiring freshers.
The CEO of Accenture has said during analyst call that AI will create more jobs for freshers with new roles emerging under the AI domain. This is in contrast to the popular narrative given by analysts, company management and other stakeholders for the last two years. So, no body exactly knows how fresher hiring landscape will evolve in the coming quarters.
But one view that has started rolling out from HR experts in recent months is that AI is creating demand for new kind of roles. Job roles like prompt engineer, AI ethics analyst, AI data scientist, AI Product Manager, AI product developer, AI data curator, AI integration consultant and others are getting created with the development of AI. It means new job roles are getting created for which young graduates need to be trained for leading in the future. Therefore, the demand for freshers may have come down temporarily but is likely to continue in the wake of new technology developments. Moreover, Indian IT industry’s whole operating model revolves around hiring freshers and any pivot from such established way will take time to evolve.