Indian IT’s fresher hiring slump signals structural shift, not just slowdown

India’s IT services industry is undergoing a quiet but significant shift in how it hires and deploys talent, as fresher intake drops sharply and delayed onboarding becomes increasingly common.

Over the past few years, there has been a growing pattern of companies issuing offer letters to campus recruits but pushing joining dates by months. One such student told Business Today that after receiving a letter of intent from Wipro in May 2025 with an August joining date, the onboarding was deferred by seven months, with only vague explanations citing “business requirements.” A group of affected candidates has since approached an IT workers’ union, citing a lack of clarity from the company.

However, industry data and company disclosures suggest that such cases are part of a broader trend rather than isolated incidents.

An 80% drop from peak hiring

The numbers reflect the scale of the shift. Fresher hiring in India’s IT sector has fallen from a peak of 600,000 in FY22 to about 120,000 in FY25, according to Xpheno, marking an 80% decline. Hiring is expected to remain only marginally higher this fiscal year.

Recent reports indicate that nearly 1,000 candidates are still awaiting joining letters from Tech Mahindra, while earlier this year, more than 200 Wipro recruits flagged deferred onboarding.

Company commentary reinforces the cautious outlook. Wipro has reduced its fresher hiring guidance to 7,500–8,000, from an earlier estimate of 10,000 and has onboarded roughly 5,000 so far. Tech Mahindra has indicated it will hire fewer freshers in FY26 as it redeploys existing talent freed up from transformation projects. Infosys presents a relatively stronger outlook, maintaining its target of 20,000 fresher hires, with 18,000 already onboarded.

Infosys CFO Jayesh Sanghrajka said the company was “well on our way to finish our 20,000 number,” describing it as an investment in future capacity, even as utilisation levels, including trainees, have moderated.

There was no response from Wipro and Tech Mahindra to queries, while Infosys declined to comment due to a silent period.

From bench-building to just-in-time hiring

The traditional IT services model, which relied on hiring large batches of fresh graduates and training them into a deployable bench, is now under strain.

“The sharp drop in fresher intake can be attributed to multiple factors that are connected to revenue, cost and margin pressures that the sector has encountered since the second half of 2022,” said Kamal Karanth, co-founder of Xpheno.

With global demand remaining volatile and deal pipelines uncertain, companies are increasingly cautious about adding headcount without immediate visibility on deployment. Hiring 10,000 freshers can require an outlay of around Rs 400 crore in salaries alone, excluding training costs, making large-scale intake difficult to justify in the current environment.

As a result, firms are moving towards a more demand-linked hiring model, relying more on lateral recruitment and staffing partners, while maintaining leaner benches and pushing utilisation higher.

Mismatch between hiring promises and reality

Employee representatives say the situation also highlights a gap between hiring announcements and actual onboarding.

“Hiring numbers are announced at the start of the year to assure investors that the business outlook is healthy, but not all of these materialise into jobs,” said Harpreet Singh Saluja, President of Nascent Information Technology Employees Senate (NITES), a Pune-based IT and ITES union. 

For students, however, the appeal of landing a job with a large IT services firm remains strong. Many choose to wait for months for their joining date rather than pursue alternative opportunities, prolonging uncertainty.

AI reshapes entry-level hiring

Artificial intelligence (AI) is emerging as an additional structural factor influencing hiring decisions. While its direct impact on jobs is still evolving, early enterprise deployments are expected to affect entry-level roles first, particularly in areas such as testing, support and basic programming.

Karanth noted that companies are increasingly prioritising freshers with “future-ready skillsets” over those with generic capabilities. He added that the long-term shift appears to be towards investing in AI enablement rather than hiring and training large cohorts for entry-level roles.

At the same time, not all companies are pulling back. Accenture CEO Julie Sweet has said that freshers remain important, arguing that younger employees are often more comfortable working with AI tools and can adapt quickly to new roles.

A new hiring playbook emerges

What is becoming evident is that the long-standing link between headcount growth and revenue expansion in India’s IT services industry is weakening.

In its place, a new hiring model is emerging, one that is more selective, more flexible and increasingly aligned with immediate business demand and technological change.

The shift may still be unfolding, but the direction is clear. The era of mass fresher hiring, once central to the industry’s growth story, is giving way to a more cautious and efficiency-driven approach shaped by economic pressures and the rise of AI.