Indian IT services firms face AI impact on future hiring

India's 1.5 million engineering graduates might find it tougher to land a job at the largest IT services companies, as employee additions might not be in proportion with revenue growth due to the rise in automation tools.

- Jas Bardia [e-mail]

Simply put, if an IT services company added 30 employees for every $100 (about ₹9,000), in new business every year, it might add fewer employees for the same amount of incremental revenue going ahead because of AI-led productivity.

AI is eating into coding, customer support, and application maintenance roles. Tata Consultancy Services, Cognizant Technology Solutions Corp., and HCL Technologies have highlighted the non-linearity of revenue and headcount growth due to AI, noting that the project delivery models are evolving.

This marks a first for the industry, which long viewed headcount growth as a proxy for revenue expansion. Traditionally, rising headcount signalled stronger demand for IT services, and vice versa. The shift in approach by the top Indian IT firms comes as AI reshapes the sector and forces a rethink of project delivery models.

HCLTech, India's thirdlargest IT firm, was the first of the big five to highlight the disconnect between revenue growth and headcount.