IT firms head for 'selective hiring' amid global headwinds

Bengaluru: IT firms are adopting a "strategic approach" to hiring amid uncertainty and cost pressures, according to hiring experts, who feel that in FY27, the industry will see a gradual but selective recovery, not a return to mass hiring.

As per Quess reports, hiring is expected to grow 12-15 per cent, though the year has started cautiously with demand already down about 8 per cent in early FY27.

"The focus will clearly shift to skill-based hiring, with fewer but higher-value roles. Growth will be driven by GCC expansion, Artificial Intelligence platform build outs, and cybersecurity investments, with GCCs expected to add 1.4-1.8 lakh new roles," Kapil Joshi, CEO of IT Staffing, Quess Corp, said.

Quess reports also indicate that contract hiring is set to rise, with 25 per cent of the GCC workforce becoming flexible today and expected to reach 30 per cent by 2030.

At the same time, Tier-2 cities are contributing 10-12 per cent of overall hiring, likely increasing to 15 per cent by 2030. Overall, FY27 will be defined by “precision hiring” — slower, more targeted, and closely aligned to business demand, Joshi said.

Sachin Alug, CEO, NLB Services, said that FY27 is likely to be a year of selective hiring rather than large-scale volume hiring.

"Demand for roles such as AI engineers, cybersecurity experts, digital engineers and cloud professionals is expected to remain stronger. However, routine roles, including fresher hiring, may continue to face pressure. Companies are prioritising skill-based and project-linked hiring, closely tied to deal flow and client spending. Overall, FY27 may see cautious recovery, led more by specialised demand than broad-based expansion," he said.

As the India Decoding Jobs Report 2026 highlights, hiring intent is still projected to grow by around 7 per cent in FY27, only the demand is shifting toward new, specialised skill sets. As far as fresher hirings are concerned, IT services firms hinted at a similar number of hirings in FY27 like that of the previous fiscal.

"FY27 opens against the backdrop of a visible reset in India's technology employment narrative, as cost discipline and AI-led efficiencies temper the momentum of recent years. Even large IT firms have slowed net hiring, while entry-level roles have contracted by nearly 20–25 per cent. This, though, should be seen as less of a slowdown and more as a rebalancing act," Devashish Sharma, Co-Founder & CEO, Taggd, said.

The FY27 expectations come against the backdrop of the country's top six IT firms cumulatively reducing workforce by 3,338 employees in FY26 compared to the previous fiscal year. The reduction is seen as a signal of challenges for the sector amid global uncertainties and persistent macroeconomic headwinds.

While the country's top IT services firm, Tata Consultancy Services, reduced headcount by 23,460 and Tech Mahindra by 1,108 in FY26, other four companies added a cumulative workforce of 21,230.

In FY25, the country's top six IT firms cumulatively added 15,375 employees. In FY24, the top 6 IT firms - TCS, Infosys, HCLTech, Wipro, Tech Mahindra and LTIMindtree trimmed headcount by 71,936 employees. 

"FY26 saw a more measured and strategic approach to hiring amid demand uncertainty and cost pressures. Organisations increasingly prioritised critical, high-impact roles over broad-based expansion, while also leveraging internal talent mobility and driving productivity gains. At the same time, there was a clear shift towards contract and project-based hiring models, which affected traditional large hiring volumes. Overall, this reflects a phase of calibrated, selective hiring rather than a slowdown," NLB Services' Alug said.

According to Quess Corp's Kapil Joshi, FY26 saw a dip in hiring not because demand disappeared, but because the market went through a structural reset.As per Quess data, while overall IT demand still grew about 16 per cent, companies operated with tighter budgets and a more cautious approach to hiring. The biggest shift was in the hiring mix — companies moved away from entry-level hiring and focused on experienced talent.

"The share of mid-level hiring increased sharply from 50 per cent to 65 per cent, while entry-level hiring dropped from 28 per cent to 15 per cent, creating a visible supply gap at the junior level. At the same time, demand for emerging skills like AI, cloud and cybersecurity rose from 38 per cent to 52 per cent, but the availability of 'deployment-ready' talent remained limited, widening the demand-supply gap further," Joshi explained.

He added that this also led to longer hiring cycles of 45-60 days, and even 75-90 days for niche roles, delaying closures.

Meanwhile, the demand landscape is increasingly centred around advanced and applied technology capabilities. Skills in AI and machine learning, data engineering, cloud ecosystems and cybersecurity will continue to be in strong demand, Sanketh Chengappa, Director and Business Head, Professional Staffing, Adecco India, said.

"Beyond this, there is a growing relevance for roles in platform engineering, DevOps, and automation, especially those that enable organisations to manage complex, large-scale digital environments efficiently. However, what is becoming equally important is the convergence of technical expertise with domain knowledge. Employers are prioritising professionals who can contextualise technology within business problems, whether in BFSI, manufacturing, healthcare or GCCs," he said.

Alongside core technical skills, organisations will need to actively enable continuous upskilling and reskilling to keep pace with evolving demand. At the same time, adaptability, problem-solving, and the ability to work in cross-functional, project-based teams are emerging as key differentiators in a more agile, transformation-led workforce environment,  Chengappa added.