The IT and IT-enabled services (ITeS) sector is facing a sharp slowdown in hiring, with placements down 10-15% in the first half of the current calendar year, Sunil Chemmankotil, country manager of staffing major Adecco, told Fe. The pressure is expected to continue into the second half as tariffs, global macroeconomic headwinds, tighter client spends, and the growing impact of artificial intelligence weigh on the industry.
The contraction comes despite the broader job market remaining resilient, with gains in e-commerce, logistics, and manufacturing helping offset weakness in IT, Chemmankotil said.
External shocks are compounding the situation. The proposed HIRE Bill in the US, which seeks to impose a 25% tax on payments made for outsourced services, threatens to erode the competitiveness of Indian IT companies.
Navigating global headwinds and internal shifts
The slowdown in hiring is not totally unexpected as leading IT firms are rethinking their traditional manpower-heavy model. Tata Consultancy Services’ said earlier this year that it would shed 2% of its global workforce, which is roughly 12,000 jobs. This was seen as a turning point for the industry, where for years, success was measured by headcount growth and the ability to deliver low-cost services at scale. That model is now under strain as clients push for output-based pricing, productivity gains, and faster adoption of AI-driven solutions.
The disruption is not confined to TCS. Staffing experts say backfilling for legacy roles has slowed across the industry, while companies step up re-skilling and redeployment programmes to align with demand for specialised skills. The emphasis is shifting toward value creation rather than raw execution, a transition likely to cause churn across middle and senior management in the near term.
Glimmer of hope for specialised roles
Yet, not all data points to gloom. A report by job platform Indeed shows technology roles still driving demand, with postings for software developers rising 9.2% and data analytics up 15.4% in July and August. Logistics-related roles also surged more than 14%. Overall job postings remain nearly 70% higher than pre-pandemic levels, underlining that while the sector is recalibrating, demand for specialised tech talent is far from collapsing.