India Inc cuts entry-level hiring, bets big on high-skilled professionals: Report

India's employment market is witnessing a structural shift, with demand increasingly moving towards experienced and specialised professionals even as overall hiring momentum slows. The latest India Hiring Pulse for May 2026 by Choice Institutional Equities shows that while companies are cutting back on mass hiring, they continue to compete aggressively for premium talent with expertise in artificial intelligence (AI), cloud computing and digital engineering.

Overall white-collar hiring growth moderated sharply to just 1% year-on-year in May, down from higher growth levels seen earlier this year, indicating broad-based weakness across sectors. The slowdown was particularly visible in technology, where hiring declined 7% year-on-year, reflecting subdued demand for conventional and lower-skilled roles.

However, the weakness has not been uniform.

Productivity, automation

According to the report, companies are increasingly prioritising productivity, automation and domain expertise over workforce expansion. This trend has resulted in a growing divergence across salary bands. Hiring for professionals earning more than ₹20 lakh annually expanded by 11% year-on-year, while recruitment in the ₹8-10 lakh and ₹4-7 lakh salary categories fell 11% each.

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The report suggests that India's traditional talent pyramid is gradually evolving into a "diamond-shaped" workforce model, characterised by a larger concentration of experienced and specialised professionals. Demand for entry-level and generalist roles is expected to remain structurally challenged.

Artificial intelligence

One area that continues to stand out is artificial intelligence. AI and machine learning hiring remained resilient, growing 22% year-on-year in May, despite moderating from the peaks witnessed in February. The report noted that AI hiring has consistently outpaced broader market trends, underlining the importance companies are placing on digital transformation initiatives.

Apart from AI and machine learning, demand remains robust for specialised talent in data engineering, cloud computing, cybersecurity and platform engineering. These skill sets are increasingly viewed as critical to helping enterprises improve efficiency and accelerate AI adoption.

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Hiring slowdown

The slowdown has spread across several sectors. Banking recorded the steepest decline in hiring, with recruitment falling 15% year-on-year. Telecom hiring contracted 12%, while pharma witnessed an 8% decline. Hiring in the auto sector also fell 7%, mirroring the decline seen in IT.

Choice Institutional Equities believes the changes point to a structural reallocation of talent rather than a cyclical downturn. Enterprises are increasingly recalibrating technology spending towards high-impact, outcome-oriented talent capable of driving AI-led transformation.

The brokerage expects this trend to benefit companies with strong AI capabilities, digital engineering expertise and premium technology staffing platforms. Among its preferred long-term picks are Coforge, Persistent Systems, Happiest Minds Technologies and KPIT Technologies.

The findings suggest that while India's job market is not shrinking uniformly, the nature of hiring is changing rapidly, with specialised skills and experienced professionals emerging as the biggest beneficiaries of the AI era.

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