ICRIER study: 55% of IT firms cut fresher hiring after adopting AI

More than half of Indian IT companies have cut back on hiring freshers since they began using artificial intelligence tools, according to a study by the Indian Council for Research on International Economic Relations (ICRIER), a New Delhi think tank, whose findings were reported on 21 and 22 October 2026. The study, titled "AI and Jobs: This Time is No Different", surveyed 651 IT firms in 10 Indian cities and found that 55% reported a fall in entry-level hiring, while hiring of senior staff stayed largely stable.

For three decades the Indian IT services industry has been the biggest single employer of fresh engineering and science graduates. Large companies traditionally hired freshers in bulk, trained them for months and placed them on routine work such as testing software, writing standard code, maintaining older systems and handling support tickets. That routine work is exactly what today's AI coding assistants and automation tools are best at. When a tool can draft code, write test cases or summarise a bug report, a company needs fewer junior people to do the first pass, even if it still needs experienced staff to check the output and handle clients.

The ICRIER numbers put a figure on what students and placement officers have been describing anecdotally. A fall reported by more than half of firms at the entry level, against a largely stable picture at senior levels, suggests that AI is changing the shape of IT teams rather than simply shrinking them. The traditional pyramid, with a wide base of juniors and a narrow top, may be giving way to a structure with fewer people at the bottom.

The study's title, "This Time is No Different", points to the authors' broader framing: that, as with earlier waves of technology, jobs change and shift rather than disappear outright. The fact that 24% of firms reported higher hiring after adopting AI supports that reading in part. Readers should note that the survey reflects what firms reported, not payroll data, and that it was carried out before the end of January 2026, so it captures an early stage of AI adoption.

The findings fit a wider pattern this month. Large IT companies have reported mixed headcount numbers for the July–September quarter, and industry surveys have noted that tech job openings for freshers remain scarce even as demand for experienced AI and data specialists rises.

Short-term: Graduates entering the 2026–27 placement season are likely to face fewer bulk offers from IT services firms, and competition for the roles that remain will be stiffer. Colleges and training institutes may face pressure to show that their students can use AI tools productively, not just write code.

Long-term: If companies hire fewer juniors, the industry will have to find new ways to build the next generation of senior engineers, since experience has traditionally been gained by doing the routine work that AI now handles. The emphasis on hybrid skills suggests that domain knowledge, such as banking, healthcare or manufacturing, combined with the ability to direct and check AI tools, will carry more weight in hiring.

Who is affected: Engineering, computer science and science graduates; engineering colleges and their placement cells; IT services companies and their training budgets; and cities whose economies depend heavily on IT employment.

Questions and Answers