Shrinking IT Entry-Level Jobs in India, Need for New Talent Models

India’s IT services sector, a longstanding launchpad for engineering graduates, is undergoing a structural transformation as Artificial Intelligence (AI) and automation reshape the fundamentals of early-career work.

For decades, freshers entering the industry performed coding, testing, support, and maintenance tasks that served as essential stepping stones in the traditional apprenticeship-based career ladder.

Today, however, these very tasks are increasingly being automated, altering the dynamics of India’s talent pipeline.

A recent EY-CII survey of 200 Indian enterprises indicates a 20–25 percent decline in entry-level hiring, pointing to the emergence of a “diamond-shaped workforce.” Mid-level and specialist roles are expanding, but the base of the pyramid—once filled with thousands of fresh engineering graduates—is narrowing significantly.

The class of 2026, comprising India’s 1.3 million annual engineering graduates, is expected to face one of the toughest job markets in recent memory as top IT firms scale back campus recruitment drastically.

The impact extends beyond hiring numbers. According to the EY-CII survey, 64 percent of companies now deploy AI for routine and repetitive tasks, effectively diminishing opportunities for juniors to learn through traditional on-the-job experiences.

At the same time, India faces a deepening skills deficit. A Deloitte-NASSCOM report projects AI talent demand to rise from 600,000–650,000 today to more than 1.25 million by 2027, even though only one in three employees currently feels confident using AI tools.

Economists Luis Garicano and Luis Rayo explain this shift through the “Expertise Leverage Ratio,” which examines whether experts, even when aided by AI, retain enough unique capability to justify hiring apprentices.

If AI closes the gap too much, organisations may bypass junior roles altogether.

Final Words

As AI accelerates automation and reshapes organisational structures, India must rethink how it develops early-career talent.

The challenge is not merely about protecting entry-level jobs, but about reimagining pathways for learning, mentorship, and skill-building in an AI-dominated world.

The choices made today will determine whether India continues to be a global technology powerhouse—or faces a widening divide between technological potential and talent readiness.

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