India's IT sector slows hiring amid weak demand, US tariffs
What's the story
India's IT sector is witnessing a slowdown in hiring, with companies revising their projections for the second half of the year, amid sluggish global outsourcing demand and uncertainty over possible US tariffs. According to data from staffing firm Teamlease, IT services firms have lowered their overall hiring expectations for July-December to 1-3%, down from an earlier estimate of 3-5%. The industry is currently short by nearly 150,000 hires compared to initial projections made at the start of the year.
Hiring trends
IT hiring projections for H2 revised
The demand for software engineers has seen a sharp contraction, with growth now limited to emerging technology roles. Aditya Mishra, CEO of recruitment firm CIEL HR, said the sector was initially expected to add about 10-11% net headcount at the start of FY26. However, this outlook has now been moderated to 6-8%.
Market impact
Global trade uncertainties and AI adoption impact hiring decisions
Sanketh Chengappa KG, Business Head - Professional Staffing at Adecco India, said global trade uncertainties are influencing hiring decisions for nearly 90% of IT companies. He added that AI adoption and cost pressures are prompting a more measured approach to workforce expansion. Despite these challenges, Teamlease Digital's CEO Neeti Sharma expects a mild recovery of 2-4% in IT hiring during the October-December quarter.
Information
Adecco India optimistic about July-December outlook
Despite the current market conditions, Adecco India's outlook for July-December is optimistic. The company expects 15-20% growth in both fresher and mid-level hiring. This prediction comes as India's software service providers have already seen a 10% slowdown in hiring between July and August this year.
Workforce reduction
TCS to lay off 12,000 employees
India's largest IT firm Tata Consultancy Services (TCS) has announced plans to lay off 2% of its workforce, or about 12,000 employees. The decision comes as a sign of muted business growth and the impact of AI on the industry. Most experts in the outsourcing sector expect a cautious hiring approach with companies focusing on niche talent in AI, ML, and data science roles.