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Even as domestic IT firms continue to hire, the pace of backfilling roles vacated due to attrition is slowing—hinting at a deeper recalibration in workforce planning. These companies are turning to AI-led productivity gains, cost optimisation, and internal mobility as alternatives to traditional hiring. Industry insiders say the trend reflects not just short-term caution, but a broader shift in response to evolving client demands, automation, and tighter margins.
“Usually, with the backfilling of attrition—for 10 open positions, we would do 10-to-10. But that has come down. Out of these 10, only 6-7 are filled. This could be because AI is helping companies derive more productivity from existing or a smaller number of employees. They might also be under more cost and margin pressure, with the overall demand coming down. Unfortunately, we are not seeing any green shoots on domestic IT demand. Even for FY26, we have not planned any substantial increase in IT staffing,” Ramani Dathi, CFO at TeamLease observed.
Sarbojit Mallick, Co-founder, of Instahyre, noted there is evidence of a decline in the backfilling of IT jobs in the Indian tech sector, particularly at the entry-level. While the sector might still be hiring overall, the rate is slowing down in most big IT brands, with fewer jobs being created to replace those who leave.
Some companies are also reducing their hiring of fresh graduates and the nature of IT work is evolving, with the focus shifting away from some traditional entry-level roles.
Hiring decisions
Factors impacting hiring decisions can be slower decision-making on IT spending in key markets like the US and Europe due to macroeconomic and geopolitical factors, said Rajesh Bharatiya, CEO & Founder, of Peoplefy.
“There is also a shift in skills required due to AI and Automation. Instead of hiring for the backfill, some companies are upskilling the existing workforce to take up the modified roles. However, reduced backfilling will have a positive impact on internal mobility. More employees will get a chance to move to another role that got vacated and no external candidate is hired,” he said.
Technological advancements in AI and automation, are leading to a potential decrease in demand for certain types of roles, Mallick commented. As a result, companies are re-evaluating their hiring strategies and focusing on skills that are in higher demand. The impact of this is being felt across various white-collar job markets, and not just IT.
Nasscom projects net hiring in the industry to rise by 126,000 this year, bringing the total workforce to 5.80 million—reflecting a modest 2.2 per cent year-on-year growth and signaling softer demand compared to previous years. While IT exports are expected to grow, the pace will be slower than in the past, he said.
“IT firms started on a strong note and have built their teams to meet the project demand for 2025. However, they remain cautious about large-scale hiring, focusing on optimising existing resources. When there is a need to backfill, they take a strategic approach considering the projects in the pipeline and aligning the right resources to prevent excess staffing. Most trainees and campus recruits hired in the past have been deployed and are bringing significant value. While firms remain vigilant amid dynamic market conditions, they continue to adopt a prudent approach to hiring,” Maya Nair, Executive Director, of Search and Selection, GI Group Holding India, added.
Published on June 4, 2025
This article first appeared on The Hindu Business Line
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