India’s $283-billion IT services sector witnessed a sharp 10% drop in hiring demand in August 2025, reflecting growing caution among employers amid global economic uncertainty, increased U.S. tariffs, and subdued discretionary tech spending.
According to staffing firms including Teamlease and Xpheno, the slowdown marks one of the steepest monthly declines in recent quarters and is expected to persist through September.
The contraction in hiring comes despite a modest year-on-year increase in headcount during the June quarter, when the industry added around 9,000 employees.
However, job additions at the top six IT firms—including Tata Consultancy Services (TCS) and Infosys—stood at just over 3,800, down nearly 72% from the March quarter.
Legacy Tech Roles Hit Hard as Demand Shifts to Emerging Skills
The decline is most pronounced in legacy tech roles, such as traditional software development and IT infrastructure.
Xpheno’s data shows that active openings for these roles fell to 43,000 at the end of August—a 9% drop from July and 24% lower than the same period last year.
Compared to September 2022, the drop is a staggering 41%.
In contrast, demand remains strong for specialized roles in artificial intelligence (AI), machine learning (ML), cloud computing, data analytics, and cybersecurity.
Neeti Sharma, CEO of Teamlease Digital, noted, “Companies are hiring in higher numbers for skills in cloud, data, cybersecurity and AI/ML coding, while the legacy tech stacks are not being hired for. Hence, the dip in hiring”.
GCCs and Product Firms Hold Steady Hiring
While IT services firms are scaling back, Global Capability Centres (GCCs), product companies, and select startups have maintained stable hiring activity.
GCCs reported 14,000 active openings in August, consistent with previous months, underscoring their resilience and growing dominance as preferred talent hubs.
The overall active openings for technology jobs across sectors stood at 102,000—down 1% from July and 24% lower year-on-year.
The tech sector’s contribution to India’s total active talent demand has dropped to 49%, compared to 53% for non-tech sectors.
Metro and Tier-2 Trends Show Mixed Signals
Hiring trends across cities reveal a mixed picture.
Hyderabad saw a 45% surge in unicorn-led recruitment, positioning itself as a hub for high-growth startups.
Jaipur and Kochi also posted notable gains in fresher hiring, up 26% and 16% respectively.
However, mid-senior level openings across metros registered a 6% month-on-month decline, and entry-level hiring also fell by 6%, indicating a broader slowdown in traditional IT roles.
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