India's tech talent pipeline is sputtering

1 month ago 8

Feature Shubh Kumar graduated from IIT Patna, one of India's famed Institutes of Technology – universities that attract millions of applicants but admit only 18,000 undergraduates.

Google CEO Sundar Pichai and IBM boss Arvind Krishna are both IIT alumni, and employers seek out IIT students. New grads are generally optimistic that attaining a degree at one of the 23 institutes is a great start to a career.

But that dream didn't come true for Kumar. Weeks before he was due to join a local startup as a software development engineer, the company revoked its job offer, citing "significant consolidation" and an "extremely challenging financial position."

Students working in Engine Research Laboratory Department of Mechanical Engineering at the Kanpur Indian Institute of Technology

The news left him reeling.

"I was prepared to begin," Kumar said. "Now I'm back to zero, just trying to stay confident," he told The Register.

Kumar's story is a familiar one across India's university campuses, where information technology students increasingly find that employers aren't interested in taking on early career workers.

The country's top five IT services firms, once a common destination for young engineers, hired around 100,000 graduates in FY 21 but are projected to employ only 70,000 by FY 26.

Other companies are also hiring fewer early-career IT pros. Data from tech staffing and HR services firm TeamLease suggests graduate hiring by Indian tech companies peaked at 600,000 in FY 21-22, then plunged to 150,000 in both 2023 and 2024.

Over half of the 23 Indian Institutes of Technology (IITs) saw graduate placement rates fall by more than 10 percentage points between 2021-22 and 2023-24, according to the "Demands for Grants" report [PDF] prepared for India's Department of Higher Education.

A Parliamentary Standing Committee called this decline "unusual," noting similar trends at other universities and shrinking average starting salaries. The committee has urged the Department of Higher Education to find ways to boost student employability.

The impact of AI

Experts see a structural change in India's IT sector, with AI and other forms of automation reducing the need for entry-level coding and support roles.

"Routine, rules-based roles such as manual testing, basic application support, and low-level coding have been most impacted," said Neeti Sharma, CEO of TeamLease. "Generative tools deliver these outputs faster, cutting the need for large fresher intakes."

This trend extends beyond India. Globally, entry-level tech roles have declined by 35 percent since January 2024, according to Milind Shah, managing director of Randstad Digital India.

Students cycle past the Alumni Clock Tower on route to lectures at IIT Kharagpur campus

Marc Einstein, research director at Counterpoint Research, adds that outsourcing-heavy countries like India will feel the impact of this shift most acutely. "It is already clear that entry-level roles are especially vulnerable," he said.

While overall hiring of entry-level IT pros is falling, Randstad's 2025 Talent Trends Report found demand for AI/ML roles surged by 39 percent.

The shift is visible on campus too. "There's excitement from students across disciplines to take up AI/ML roles," says Arpan Kar, chair professor in the Yardi School of AI and the Department of Management Studies, IIT Delhi. "Our recent curriculum overhaul mandates AI courses for all B.Tech and M.Tech programs."

GCCs are the new offshoring

Global Capability Centers (GCCs) – the term for offshore tech teams multinationals create to serve their global needs – are a major source of IT jobs in India.

India is home to over half the world's GCCs, and analysts expect it will host more than 2,200 centers by 2030, collectively representing a $100 billion industry that employs 2.8 million people.

For now, however, GCCs aren't interested in graduates because they need specialists who are ready to drive existing IT setups.

The rise of GCCs is changing the tech jobs available in India.

"India's IT sector is moving from mass outsourcing to an innovation-driven talent ecosystem," says talent expert Abhijit Bhaduri.

For freshers, however, the shift can feel exclusionary. "With a few exceptions, GCCs have been taking baby steps when it comes to fresher hiring," admits Mohua Sengupta, a recognized GCC and IT services leader.

Campuses are adapting to this new reality by teaching more in-demand skills.

"Last year, none of our graduates chose conventional software engineering roles," says Shashwat Bhardwaj, PG placement coordinator, School of AI, IIT Delhi. "Every student went into positions like AI engineer, data scientist, or quant roles." As GCCs and startups demand niche skills, candidates are being forced to recalibrate their career paths.

Saksham Rathi, an IIT Bombay CSE student, notes: "With fewer traditional IT jobs, many of us are now looking at AI/ML and product-based roles."

Reinventing the pipeline

The slowdown in graduate hiring exposes a growing mismatch between education and industry.

"The void between what is taught and what is required is widening," says Dr Y Shekar, faculty member and in-charge of the Center for Digital Enterprises at the Indian Institute of Management Udaipur. "Soft skills will ride over hard skills. Those who can collaborate, communicate, and adapt will survive."

Companies are responding by overhauling how they train freshers.

The administrative building of IIT Roorkee, whose construction began in 1852

IT firm Tech Mahindra, for instance, is embracing a "skills-first lens to equip talent for high-value, future-ready roles," said Richard Lobo, the company's chief people officer. Their AI-powered Upskilling-as-a-Service (UaaS) platform maps fresher aspirations and skill profiles to evolving business needs, ensuring alignment from day one.

Indian tech industry lobby group NASSCOM argues that the nation's ability to scale and skill its digital talent remains a core competitive edge.

"The IT sector's historical reliance on a large influx of freshers is being fundamentally reshaped," observes Abhimanyu Saxena, co-founder of Scaler – an edtech firm. Entry-level roles are evolving, but Saxena believes "the size of the pie is growing" for those with the right skills.

One way academia is adapting, as Bhardwaj of IIT Delhi notes, is by giving students more hands-on projects and access to advanced computing tools.

Shubh Kumar eventually found a job, but said doing so was far tougher than the campus recruitment process that led to the startup offering him a gig.

"Off-campus, everything depends on your own effort," he said. "The process demands a lot more persistence."

The long-term outlook, however, still points to expansion. NASSCOM projects that India's tech workforce will double to 10 million by 2030, with AI alone expected to generate 2-3 million jobs.

But as Sharma of TeamLease cautions, realizing this pipeline's strength depends on how effectively the system adapts. "India's vast STEM output and growing GCC base are advantages, but only if we embed AI, data, and cloud skills into education and industry partnerships," she says.

Professor Kar views the "volume-to-value" shift as an evolution. "Students are still getting placed," he observes, pointing out that talent has long been concentrated in services. "As India's manufacturing and core sectors expand, new avenues will open." ®

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